CESTAT Rejects Refund Claim on Service Tax for Educational Courses Not Recognized by YCMOU During Relevant Period [Read Order]

The Mumbai Bench of Customs,Excise and Service Tax Appellate Tribunal(CESTAT)rejected the refund claim on service tax paid by the assessee for educational courses, as the courses were not recognized by Yashwantrao Chavan Maharashtra Open University (YCMOU) during the relevant period from April 2014 to September 2014.

Maharashtra Knowledge Corporation Ltd.,appellant-assessee,  had registered for providing services such as maintenance, IT supply, business support, and coaching. It started offering WAVE courses in 2011 under an agreement dated 07.06.2011 and began KLiC diploma courses from 01.04.2014. An agreement with YCMOU was signed on 30.03.2015, after which both WAVE and KLiC courses were continued, and course fees were collected from students.

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The assessee claimed that these courses were exempt from service tax under Section 66D(l)(ii) of the Finance Act, 1994, which covered education leading to a qualification recognized by law. It submitted a letter from YCMOU dated 20.06.2016 confirming that the KLiC course was effective from September 2013 and certificates were issued to successful candidates.

Refund claims for service tax paid on course fees were rejected on the grounds that the courses were not recognized during the relevant period and the agreement with YCMOU came only in March 2015. Authorities also held that the refund was time-barred, as the hard copy was filed on 08.06.2015, though the assessee claimed that an online application had been submitted in April 2015. The Commissioner (Appeals) upheld the rejection, leading to appeal before the tribunal.

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The two member bench comprising Dr.Suvendu Kumar Pati(Judicial Member) adn Anil G.Shakkarwar(Technical Member) looked at the appeal papers, submissions from both sides, the law, and earlier decisions. It found that the assessee had not received recognition from YCMOU before 31.03.2015. The letter dated 20.06.2016 was only a post-dated approval and could not be accepted under Section 66D of the Finance Act. The documents showed that students enrolled in 2014 but received certificates only in 2016 after recognition was given.

The appellate tribunal held that to get the exemption under Section 66D(l)(ii), the courses had to be recognized at the time they were provided. Refund could be allowed only if no service tax was collected from students. The assessee’s counsel admitted that the fee receipts mentioned that fees were ‘inclusive of all taxes.’

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Since recognition came later and certificates were issued much after the courses were offered, the CESTAT held that exemption was not available. It also found that the refund claim was filed late. Therefore, it upheld the rejection of the refund.

In short,the appeal was dismissed.

To Read the full text of the Order CLICK HERE

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