The Ahmedabad bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that Service Tax was not leviable from Sophisticated Instrumentation (the Appellant) as it was run and managed by a charitable Organisation and allowed the appeal by them against the order issued by the Commissioner of Central Excise (CCE) and Service Tax (ST).
The CCE issued an order demanding service tax for the year 2006-2007 from Sophisticated Instrumentation under the head “Commercial Training or Coaching Service” from their total income of Rs. 2,73,022/- for the year.
The counsel who appeared on behalf of the appellant submitted that they were run and managed by Charutar Vidya Mandal, a non-profit organization registered as a public charitable trust, and that they were sponsored by the Department of Science and Technology, Government of India and are recognized by their management and Sardar Patel University.
The counsel contended that they were not providing coaching classes but provided facilities to the students of the Institute of Science and Technology for further Advanced Studies and Research and students of their management by providing training. He also submitted that they don’t receive any fee for their service, but receive fees from their management.
The counsel further submitted that in the Finance Act, 2010, an explanation was inserted w.e.f. 01.07.2003 in the definition of Taxable Service of “Commercial Training or Coaching Centre” stated that even non-profit organizations shall be included within the scope of the service “Commercial Training or Coaching Centre service” and added that the invocation of the extended period was not justified.
The counsel who appeared on behalf of the revenue relied on the impugned order.
The two-member bench consisting of Ramesh Nair (Judicial Member) and Raju (Technical Member) after hearing both sides held that the appellant was a charitable trust and the invocation of the extended period of limitation was not justified. Therefore, the appeal was allowed.
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