Delhi CESTAT, while upholding the service tax demand against Indian Institute of Planning & Management, ( IIPM ) held that the activities undertaken by them would come under the ambit of “Commercial Training or Coaching Centre”.
The bench was hearing an appeal filed by the Revenue against the order of the first appellate authority wherein the service tax demand against the Assessee-Institute was dropped.
Indian Institute of Planning & Management engaged in providing management course and also MBA, BBA Degrees of International Management Institute. Upon Investigation Directorate General of Central Excise Intelligence found that IIPM was not paying Service Tax on the fees collected for the various academic courses like MBA, BBA, FIIPM, AFIIPM and also various training courses being organized by them.
Department issued show cause notice after collecting various documents and recording the statements of various persons connected with IIPM. The said show cause notice mentioned the allegations like IIPM were charging huge amounts from each student for distinct courses and also added that IIPM does not result in award of any certificate then the activity will fall under the category of Section 65 (105) (zzc) of the Finance Act and is a taxable service liable to payment of Service Tax.
On the first appeal, the Adjudicating authority while invoking section 65 (26) of the Act concluded that the way in which IIPM giving training program is distinct from the ambit of Commercial Training or Coaching and the authority dropped the demand of Service Tax on the fees collected by IIPM towards such courses.
Aggrieved with this decision Revenue appeared before CESTAT. On behalf of the Revenue, the counsel, Amresh Jain contended that the exclusion provided in the statutory definition is not applicable to IIPM since the institution not affiliated to any university and do not possess approval from AICTE or UGC.
The revenue also argued that only those centers which are covered under the exclusions provided in Section 65 (27) will fall outside the Service Tax ambit.
The bench comprising judicial member S.K. Mohanty and Techincal Member V. Padmanabhan heard the submissions of both the parties and also pressed the importance of statutory definitions mentioned in the tribunal.
The Tribunal reproduced the definition as “commercial training or coaching” means any training or coaching provided by a commercial training or coaching Centre” and also added that the object of such activities meant for imparting skill or knowledge or lessons on any subject or field other than the sports.
The bench after hearing both the sides held that there is no scope to exclude the Academic Courses conducted by IIPM from the purview of Service tax levy. The CESTAT bench further observed that “The exclusion provided in Section 65 (27) is available to any institute or establishments which issue any certificate or any educational qualification recognized by law for the time being in force. But it is an admitted position that the certificates and degrees awarded by IIPM and also by IMI, Europe do not enjoy the recognition from AICTE or UGC”.
Therefore bench admitted that IIPM clearly falls under the definition of Commercial Training or Coaching Centre as defined in law Section 65 (27) and the services rendered by them are liable to Service Tax.
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