The New Delhi bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that the commercial training or coach services that were provided by the Institute of Clinical Research (ICR) are liable to service tax.
Institute of Clinical Research (India), the appellant assessee was a society registered under the provisions of the Societies Registration Act, 1860 and also recognized as a charitable organization under section 12AA of the Income Tax Act, 1961 and engaged in imparting education in the field of Postgraduate Courses in ‘clinical research’ in India, entered into collaboration with Cranfield University, UK under an Agreement titled ‘Postgraduate Clinical Research Courses Collaboration Agreement’.
The assessee appealed against the order passed by the Commissioner, Service Tax for confirming the demand of service tax proposed in the two show cause notices under ‘commercial training or coaching’ services defined under section 65(26) of the Finance Act, 1994.
A.K Batra, the counsel for the assessee contended that the Indian Institute was imparting education to students in ‘clinical research’ and was not conducting any commercial training or coaching activity. Hence the activities of the Indian Institute fall outside the scope of commercial training or coaching services and the demand was, therefore, liable to be set aside.
Harshvardhan, the counsel for the department contended that the Indian Institute was engaged in providing commercial training or coaching services as it conducts a course in clinical research in collaboration with UK University and so the fees collected by the Indian Institute from the students intending to pursue the said degree course would attract service tax.
The Bench observed that under Section 65(27) of the Finance Act, the court held that service tax was leviable on the ‘commercial training or coach service ’ provided by the ICR. The two-member bench comprising Dilip Gupta (President) and Hemambika Priya (Technical) upheld the service tax demand imposed against the assessee
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