w w w . L a w y e r S e r v i c e s . i n



National Institute of Construction Management and Research and Others V/S Commissioner of Service Tax and Others.


Company & Directors' Information:- D D MANAGEMENT SERVICE PRIVATE LIMITED [Active] CIN = U74140MH2008PTC177535

Company & Directors' Information:- NATIONAL CONSTRUCTION CO. PVT LTD [Active] CIN = U45200JH2007PTC012720

Company & Directors' Information:- K D MANAGEMENT SERVICE PRIVATE LIMITED [Active] CIN = U74120MH2013PTC240999

Company & Directors' Information:- NATIONAL RESEARCH INSTITUTE LTD [Strike Off] CIN = U24233WB1945PLC012949

Company & Directors' Information:- CONSTRUCTION MANAGEMENT PRIVATE LIMITED [Strike Off] CIN = U45209TN1989PTC017501

Company & Directors' Information:- S D SERVICE MANAGEMENT PRIVATE LIMITED [Active] CIN = U74990MH2009PTC190941

Company & Directors' Information:- R R TAX MANAGEMENT PRIVATE LIMITED [Strike Off] CIN = U74999TN2012PTC085837

Company & Directors' Information:- H S MANAGEMENT INSTITUTE PRIVATE LIMITED [Active] CIN = U74140DL2005PTC141500

Company & Directors' Information:- A S INSTITUTE OF MANAGEMENT PRIVATE LIMITED [Strike Off] CIN = U80302DL2005PTC140941

Company & Directors' Information:- S & P MANAGEMENT SERVICE PRIVATE LIMITED [Strike Off] CIN = U74999HR2010PTC041245

    Appeal Nos. ST/87302/15 and ST/87596/13 (Arising out of Order-in-Original No. 21/PR. COMMR/ST-II/PK/2015-16 Dated: 30.7.2016 Passed by the Commissioner of Service Tax, Mumbai-II) & OIO No. 34/P-III/ST/COMMR/2012-13, Dated: 30.3.2013 Passed by the Commissioner of Central Excise & Service Tax, Pune-III) and Order Nos. A/90157-90158/17/STB

    Decided On, 12 October 2017

    At, Customs Excise Service Tax Appellate Tribunal West Zonal Bench At Mumbai

    By, THE HONORABLE JUSTICE: RAMESH NAIR
    By, MEMBER AND THE HONORABLE JUSTICE: RAJU
    By, MEMBER

    For Petitioner: L. Badrinarayanan, Advocate And For Respondents: P. Vinitha Sekhar, Jt. Commr. (A.R.)



Judgment Text


1. These two appeals are directed against the Order-in-Original No. 21/PR. COMMR/ST-II/PK/2015-16 dt. 30.7.2016 passed by the Principal Commissioner of Service Tax, Mumbai-II & OIO No. 34/P-III/ST/COMMR/2012-13 dt. 30.3.2013 passed by the Commissioner of Central Excise & Service Tax, Pune-III, Commissionerate. The fact of the case is that the appellant M/s. National Institute of Construction Management & Research (NICMAR) are engaged to promote education, training, research, professionalism and skill formation at all levels of the construction and other allied industries; that they conducted two year, one year full time post graduate courses at Pune, Goa and Hyderabad in fields such as Advance Construction Management, Project Engineering & Management, Real Estate & Urban Infrastructure Management, Infrastructure Finance, Development & Management, Quantity Surveying & Health Safety Environment & Management; that they also conducted two years post graduate, one year graduate and six months certificate programmes by way of distance education by correspondence; that apart from the above, NICMAR also conducted in service training programmes, either at NICMAR campus or on-site at the customer's site, which were of short duration and designed as per requirement of the customer: that they also carried out consultancy work which were more of research and problem based for various industries; that for conducting various programmes, NICMAR received consideration from students and issued them receipts; that they also provided hostel facility to the students along with mess facility which was optional for which separate receipts were prepared; that for in service programmes/research & consultancy NICMAR raised bills/invoices on the customers on which service tax amount was also charged from the customers; that after completion of the courses/programmes, NICMAR issued certificates duly signed by the Dean (Post Graduate Programme), Director General NICMAR & Chairman of the Board of Governors; that the income and expenditure account submitted by NICMAR for the period 2006-07 to 2010-11 and also on comparing with ST-3 returns of reconciliation, it was seen that NICMAR had short paid service tax on in service training programmes and research and consultancy activities; that further they had not paid service tax on income received on account of educational activities. Therefore show cause notice demanding differential service tax and proposing penalties and interest was issued which was culminated into the adjudication order dt. 30.7.2015, which is one of the impugned order in the present Appeal. However, the penalties proposed under Section 76, 77 & 78 was not imposed invoking Section 80 of the Finance Act, 1994.

2. In case of other appellant M/s MIT Institute of Design, the fact is that the MIT Institute of Design is one of the Institute of Maharashtra Academy of Engineering and Educational Research (MAEER) which is imparting various graduate diploma and post graduate diploma courses in design management such as Graduate diploma in Interior Space & Equipment design, Graduate diploma in Animation Design, Post Graduate Diploma in Product Design etc. by charging fees for the courses from their students. During the course of survey conducted by the department, it was observed that M/s. MIT were engaged in providing such services, classifiable under the category of "Commercial training and coaching services". Accordingly M/s MIT was requested vide letters to furnish the necessary information for verification which was finally received on 23.9.2011. The said documents/information were scrutinized. It was found that M/s. MIT was neither registered with service tax department under the category of commercial training or coaching service nor had discharged the service tax liability in respect of taxable services provided by them during the period 01/04/2006 to 31/03/2011. Therefore show cause notice proposing classification of the service under commercial training or coaching service, demand of service tax, interest, fees, penalties was issued. The said show cause notice was adjudicated by the Commissioner vide impugned order-in-original dt. 30.3.2013 wherein the classification of taxable service as "Commercial Training or Coaching Service" defined under Section 65(105)(zzc) of the Finance Act, was confirmed demand of service tax, interest, fees and penalties under Section 77 & 78 was also imposed. Being aggrieved by both the orders-in-original, the appellants filed present appeals.

3. Shri L. Badrinarayan, Ld. Counsel appearing on behalf of the appellants made the following submissions on behalf of the M/s. National Institute of Construction Management & Research (NICMAR).

i) Service tax was levied only on training or coaching and not education

The levy under 'Commercial training or coaching' is levied on 'training or coaching' provided by a Commercial Training or Coaching Centre. The Appellants are imparting education and hence will not be covered under the definition of Commercial Coaching or Training Centre.

ii) The Appellants are a vocational training institute, thus are eligible to the exemption under Notification No. 9/2003-S.T., dated 20-6-2003.

Even if the Appellants is regarded as a Commercial Coaching or Training Centre, they would satisfy, the definition of a Vocational Training Institute and are eligible to the exemption under Notification NO. 9/2003-ST, dated 20-6-2003.

The courses provided by the appellants also conveys that the training provided by the appellants was vocational in nature, as the primary focus of the courses was to enable the students to seek employment.

Through its industry specific course curriculum and content, the appellants have proved very successful in fulfilling ideally the specialized job requirements of organizations in construction, real estate, project and infrastructure sectors.

The number of organizations visiting the campus the number of job offers, the number of students actually placed, the average and maximum salaries offered to the pass outs have steadily increased over the years.

Therefore, the training provided by the appellants to the students was exempted from the payment of service tax being a vocational training institute.

iii) Extended period of limitation cannot be invoked in the present case.

In any case, extended period of limitation cannot be invoked in the present case as there is not suppression of facts with intent to evade payment of service tax. Part of the demand would be time barred for the following reasons:

a. The issue involved in the present case is one of interpretation of statutory provision. In this regard Hon'ble Tribunal in Magnus Society v. CCE : 2009 (13) STR 509 (Tri-Bang) and other cases has held institutions imparting education cannot be considered as commercial training or coaching centers and demand was dropped.

b. Insertion of subsequent explanation in Section 65(105)(zzc) vide amendment in 2010 with retrospective effect that in commercial training or coaching centers services the term 'commercial' is not relevant as such showed that legislature also appreciated confusion among tax payers and court/tribunals.

c. Hon'ble Tribunal in I2IT Pvt. Ltd. v. CCE, 2015 (934) STR 214 (Tri-Mumbai) set aside invocation of extended period in relation to demand of service tax under the category of commercial training or coaching centres.

The said Tribunal's judgment has also been affirmed by Hon'ble High Court in 2014 (3) STR J115 (Bom.).

d. The mere fact that in the case of Great Lakes Institute of Management Ltd. v. CST : 2013 (32) STR 305 (Tri-LB) the matter was referred to third bench/Larger Bench as both the members of the Tribunal had difference of opinion with regards to levy of service tax under 'commercial training or coaching centers Services'. This itself implies that the said matter is subject to interpretation of Law.

e. In Shri Chaitanya Educational Committee v. CC, I & ST : 2016 (41) STR 241 (Tri-Bang) as there was difference of opinion between both the member of the Bench with regards to invocation of extended period, the matter was referred to third bench, who set aside the invocation of extended period. In the said matter, extended period was set aside even when one of the center of the company was not discharging service tax whereas other was discharging service tax liability. However, the facts of the present matter is at better footing and hence extended period cannot be invoked.

The submission on behalf of M/s. MIT Institute of Design (MAEER)-

i) Service tax was levied only on training or coaching and not education

The levy under 'Commercial Training or coaching' is levied on 'training or coaching' provided by a Commercial Training or Coaching Centre. The Appellants are imparting education and hence will not be covered under the definition of Commercial Coaching or Training Centre.

ii) The Appellant is part of MAEER. MAEER is conducting many courses which are degrees/diploma recognized by law. Therefore, Appellant would not fall within the definition of the term 'Commercial Training or Coaching Centre'.

Vide amendment dated 01 May 2011, the words, "but does not include pre-school coaching and training centre or any institute or establishment which issues any certificate or diploma or degree or any educational qualification recognized by law for the time being in force" have been removed from the definition of the term Commercial Training or Coaching Centre as contained in Section 65(27).

Up to 30.04.2011, the definition of 'commercial training coaching centre' as contained in section 65(27) of the Act, expressly excludes an institute or establishment which issues any certificate or diploma or degree or any educational qualification recognized by law for the time being in force. Therefore, if an institution issues even a single educational qualification, recognized by law, then the institution as a whole is excluded from the definition of 'commercial training or coaching centre'.

MAEER, of which the Appellant is part conducts many courses which are recognized by the Universities in India or by professional councils like AICTE etc. MAEER as an institution is conducting some of the courses which are recognized by law, the MAEER as an organization would not fall in the definition of the term Commercial Coaching or Training Centre. The Appellant being part of MAEER would not fall into the ambit of the definition of the term Commercial Coaching or Training Centre. Therefore, the Appellant would not be liable to make payment of service tax during the present period of dispute.

iii) The Appellant is entitled to the exemption available to 'Vocational Training Institute' in terms of Notification No. 24/2004-ST dated 10.09.2004 upto 27.02.2010.

Commercial Training or coaching centre which render 'vocational training' or 'recreational training' are exempt from service tax in terms of Notification No. 24/2004-ST dated 10.09.2004 upto 27.02.2010. Same has also been clarified by department vide Circulardated 28.1.2009. It is submitted that the Appellant's students are sort after in the Design related industries. Various companies itself come in the campus of the Appellant for taking the students of the Appellant as its employees directly after completion of the course. Further, many of the students of the Appellant also take up self-employment after the completion of their course.

iv) The demand in dispute should be computed on inclusive basis.

The consideration received by the Appellant towards the coaching and training services should be considered to be cum service tax price. That means the consideration received should be considered to be including the value of applicable service tax and said service tax amount should be appropriately excluded while computing the demand in dispute. The impugned order is bad in law to the extent it has not considered the amount of course fees to be cum service tax and hence is liable to be set aside to this extent.

v) Quantification of demand is incorrect

The service tax if any could be demanded from the Appellant would be only after adjusting the CENVAT Credit of Service Tax paid by the Appellant in terms of the provisions of CENVAT Credit Rules, 2004 on the various input services received by the Appellant. The quantification of service tax demand needs to be adjusted based on the following as well:

a. The value of Taxable Services have been computed on the basis of revenue reported in the profit and loss account.

b. Admission cancellation charges do not form part of the assessable value for the purpose of determining Service Tax liability.

c. Fine imposed on the student does not form part of the assessable value for the purpose of determining Service Tax liability.

d. Sale of forms and prospectus does not form part of the assessable value for the purpose of determining Service Tax liability.

e. Amounts on account of rebate in fee and freeships awarded to the students needs to be deducted to the assessable value.

f. The revenue towards mess charges, hostel charges/accommodation charges and sale of books would not form part of the taxable service.

vi) Extended period of limitation cannot be invoked in the present case.

In any case, extended period of limitation cannot be invoked in the present case as there is not suppression of facts with intent to evade payment of service tax. Part of the demand would be time barred for the following reasons:

a. The issue involved in the present case is one of interpretation of statutory provision. In this regard Hon'ble Tribunal in Magnus Society vs. CCE : 2009 (13) STR 509 (Tri-Bang) and other cases has held institutions imparting education cannot be considered as commercial training or coaching centers and demand was dropped.

b. Insertion of subsequent explanation in Section 65 (105)(zzc) vide amendment in 2010 with retrospective effect that in commercial training or coaching centers services the term 'commercial' is not relevant as such showed that legislature also appreciated confusion among tax payers and court/tribunals.

c. Hon'ble Tribunal in I2IT Pvt. Ltd. vs. /CCE : 2014 (34) STR 214 (Tri. Mumbai) set aside invocation of extended period in relation to demand of service tax under the category of commercial training or coaching centers.

The said judgment has also been affirmed by Hon'ble High Court in 2014 (3) STR J115 (Bom.).

d. The mere fact that in the case of Great Lakes Institute of Management Ltd. vs. CST : 2013 (32) STR 305 (Tri-LB) the matter was referred to third bench/larger Bench as both the members of the Tribunal had difference of opinion with regards to levy of service tax under 'commercial training or coaching centers Services'. This itself implies that the said matter is subject to interpretation of Law.

e. In Shri Chaitanya Educational Committee vs. CC, I & ST : 2016 (41) STR 241 (Tri. Bang.) as there was difference of opinion between both the member of the Bench with regards to invocation of extended period, the matter was referred to third bench, who set aside the invocation of extended period. In the said matter, extended period was set aside even when one of the center of the company was not discharging service tax whereas other was discharging service tax liability. However, the facts of the present matter is at better footing and hence extended period cannot be invoked.

(vii) As it has been discussed in the preceding para's that the Appellant is not liable to pay service tax, the Appellant cannot be subjected to penalty under section 76, 77 or 78 of the Finance Act, 1994.

(viii) In light of the above submission, the appeal should be allowed with consequential relief".

4. Ms. P. Vinitha Shekhar, Ld. Jt. Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. She made the following submissions on behalf of M/s National Institute of Construction Management and Research:

"3.1 The definition is very exhaustive and includes any Institution which awards a degree, certificate or diploma. CBEC Circulardated 28.01.2009 further clarifies that Educational Institution other than colleges/institutes not recognised under the law would otherwise be within the ambit of the taxable service of Commercial Training or Coaching Service. Reliance is placed on the larger bench decision in the case of Great Lakes Institute of Management Ltd. Vs. Commissioner of Service Tax, Chennai [2013 (32) S.T.R. 305], Balaji Society vs. Commissioner of Central Excise [2015 (38) S.T.R. 139] and Dewsoft Overseas Pvt. Ltd. Vs. Commissioner of Service Tax, New Delhi [2016 (44) S.T.R. 285]

3.2 The definition only excludes institutes providing education in the field of sports, Pre-School and those institutes or establishment which issues any certificate or diploma or degree or any educational qualification recognised by law for the time being in force. NICMAR falls under none.

3.3 The concept of recognition by law w.r.t. certificate or diploma or degree or any educational qualification has been clarified by the CBEC in circular no. dated 28.01.2009.

3.4 Hon'ble Kerala High Court Judgement in the case of Mallapuram District Parallel College Association can be distinguished and has rightly been distinguished by the larger bench in the case of Great Lakes Institute of Management LTd. Vs. Commissioner of Service Tax, Chennai [2013 (32) S.T.R. 305]- para 8.

3.5. The Contention of NICMAR that they are offering Vocational Training is totally misplaced. Reliance is placed on CBEC circulardated 28.01.2009, Circular no. 59/8/2003 dated 20.06.2003 and Notification no. 3/2010-ST dated 27.02.2010. Reliance is placed on the decision of this tribunal in the case of Sadhana Educational & People Dev. Ser P. Ltd. Vs. CCE, Pune III. [2015 (40) S.T.R. 1107].

3.6. Invoking extended period - NICMAR was well aware of the provisions of law. They had already taken registration under service tax under the category of Scientific and Technical Consultancy Service. They were also charging and collecting service tax on consultancy service and In-house training programme. Yet they have not declared their income from commercial training or coaching service in their ST 3 returns as exempted income. This was despite the fact that CBEC had clarified the nature of the service by the year 2010. They cannot claim ignorance of law or confusion in the law because even before initiation of the investigations, clarity was brought in the classification and the same was no longer a debatable issue. The SCN was issued in 2012 by which time the retrospective amendment was already in place. If NICMAR had bonafide belief, they would have on their own come forward and paid the dues immediately after the clarifications were brought in. They didn't even seek a clarification from department. The very fact that NICMAR failed to come forward either to intimate the department or pay the applicable service tax clearly establishes that they had clear intentions to evade duty. They had also short paid duty in respect of Technical Consultancy service and in-house training in which case they were charging and collecting service tax. (para 5.4 of SCN, page 774 of the Appeal book]. This case is clearly distinguishable from the cases cited by the appellant as in this case the element of confusion was no longer there as it existed in other cases. Therefore, demand should be upheld for the extended period. Reliance is placed on Jay Ajit Charia vs. Commissioner of Central Excise and Service Tax, Surat-I [2015 (40) S.T.R. 1139] and Balaji Society vs. Commissioner of Central Excise [2015 (38) S.T.R. 139].

3.7 Just because section 80 has been invoked does not mean extended period cannot be upheld. Reliance is pace on Srilankan Airlines vs. Commissioner of Service Tax, Chennai [2013 (29) S.T.R. 365], Tech Mahindra Ltd. Vs. Commissioner of C. Ex, Pune-III [2015 (38) S.T.R. 1200]".

Submission made by the Ld. AR on behalf of M/s MIT Institute of Design-

3.1 The definition is very exhaustive and includes any Institution which awards a degree, certificate or diploma. CBEC Circulardated 28.01.2009 further clarifies that Educational Institution other than colleges/institutes not recognised under the law would otherwise be within the ambit of the taxable service of Commercial Training or Coaching Service. Reliance is placed on the larger bench decision in the case of Great Lakes Institute of Management LTd. Vs. Commissioner of Service Tax, Chennai [2013 (32) S.T.R. 305], Balaji Society vs. Commissioner of Central Excise [2015 (38) S.T.R. 139] and Dewsoft OverseasPvt. Ltd. Vs. Commissioner of Service Tax, New Delhi [2016 (44) S.T.R. 285]

3.2 The definition only excludes institutes providing education in the field of sports, Pre-School and those institutes or establishment which issues any certificate or diploma or degree or any educational qualification recognised by law for the time being in force. M/s MIT falls under none.

3.3 The concept of recognition by law w.r.t certificate or diploma or degree or any educational qualification has been clarified by the CBEC in circular no. dated 28.01.2009.

3.4. Hon'ble Kerala High Court Judgement in the case of Mallapuram District Parallel College Association can be distinguished and has rightly been distinguished by the larger bench in the case of Great Lakes Institute of Management Ltd. Vs. Commissioner of Service Tax, Chennai. [2013 (32) S.T.R. 305] - para 8

3.5. MIT has claimed that some of the institutes/colleges of MAEER are recognised by AICTE. It is submitted that MAEER is a Trust and has lot of institutions/colleges under its aegis. MIT is one such institute however it is rendering services from its separate campus, collecting fees from the students to whom they are imparting commercial training and coaching in the field of design and maintaining separate accounts, preparing a separate Balance-Sheet and is a separate legal entity. Each of the colleges /institutions of MAEER is separate institute or service providers for the purpose of levy of service tax and hence MIT would be the service provider and not MAEER. The Amendment brought in 2011 talks about recognized and non-recognized courses provided by an institute and not by the many institutes under a society or a trust. The Adjudicating Authority has clearly held in her finding why Amendment brought in 2011 is not applicable in their case. Para 18.5 of O-I-O (page 286 of appeal book).

3.6 The contention of MIT that the design courses offered by them are in collaboration with recognized foreign university holds no good as this aspect has been clarified by the CBEC vide its circular nodated 28.01.2009 - para 3.8.

3.7. The Contention of MIT that they are offering Vocational Training is totally misplaced. Reliance is placed on CBEC circular nodated 28.01.2009, Circular no. 59/8/2003 dated 20.06.2003 and Notification no. 3/2010-ST dated 27.02.2010. Reliance is placed on the decision of this tribunal in the case of Sadhana Educational & People Dev. Ser. P. Ltd. Vs CCE, Pune III. [2015 (40) S.T.R. 1107]

3.8 Invoking extended period - MIT neither took registration nor filed any ST-3 returns, even after repeated letters from the department. This was despite the fact that CBEC had clarified the nature of the service by the year 2010. They cannot claim ignorance of law or confusion in the law because even before initiation of the investigations, clarity was brought in the classification and the same was no longer a debatable issue. The SCN was issued in 2012 by which time the retrospective amendment was already in place. If MIT had bonafide belief, they would have on their own come forward and paid the dues immediately after the clarifications were brought in. They didn't even seek a clarification from department. The very fact that MIT failed to come forward either to intimate the department or pay the applicable service tax clearly establishes that they had clear intentions to evade duty. Further MIT did not respond to many letters written by the department from 17.09.2009 to 1.03.2011. Atleast 14 letters were written to MIT calling for the information which was finally received only on 23.09.2011 and SCN was issued within a month. Their very act of withholding the information for two years proves that they had all intentions to suppress the facts with intent to evade duty. This case is clearly distinguishable from the cases cited by the appellant as in this case the element of confusion was no longer there as it existed in other cases. Therefore, demand should be upheld for the extended period. Therefore penalty under section 78 may also be upheld.

We have carefully considered the submissions made by both the sides and perused the records. From the facts of both the cases, we find that the appellants are providing various education programmes in different fields. The revenue has classified the said service under the head of commercial training or coaching service by the commercial training or coaching centre which is defined under Section 65(27) of the Finance Act, 1994 and reads as follows:

"Commercial Training or Coaching Centre" means any institute or establishment providing commercial training or coaching for imparting skill or knowledge or lessons on any subject or field other than the sports, with or without issuance of a certificate and includes coaching or tutorial classes but does not include preschool coaching and training centre or any institute or establishment which issues any certificate or diploma or degree or any educational qualification recognised by law for the time being on merit".

From the plain reading of the above definition it can be seen that all the commercial training or coaching for imparting skill or knowledge or lessons on any subject or field are covered under commercial training or coaching centre. The exclusion is provided from the ambit of this service with regard to sports activity and preschool coaching and training centre or any institute or establishment which issued any certificate, diploma, degree of any educational qualification recognized by law for the time being in force. As per the facts of the present cases, the service of both the appellants are squarely covered in the first limb of definition. Since imparting of skill knowledge or lessons is not on the sports and the education is not related to preschool coaching and training also the establishment does not issue certificate, diploma, degree or any educational qualification which was recognized by law, the training or coaching provided by the appellants do not fall under the exclusion category of the definition therefore squarely covered under the definition of commercial training or coaching centre. On the identical issue the Larger Bench of this Tribunal in the case of Great Lakes Institute of Management Ltd. Vs. CST : 2013 (32) STR 305 (Tri.-LB) has passed the following order:

"25. On the aforesaid analysis, we answer the reference as follows:

(i) The taxable service of "commercial training or coaching" occurs when any institute or establishment is engaged in the activity of imparting skill, knowledge or lessons on any subject or field (excluding sports), irrespective of whether such imparting of skill, knowledge or lessons is in respect of particular discipline or a broad spectrum of disciplines/ academic areas; irrespective of the nomenclature or description of the institute or establishment, as a coaching or training centre or an educational institution; regardless of whether an institute or establishment is incorporated by or registered under any law; and irrespective of distinctions on the basis of curriculum, course content, teaching methodology, course duration or otherwise. Activities of imparting skills, knowledge, lessons on any subject or field or when provided by any entity, institution or establishment which is excluded by a specific and legislated exclusionary clause would alone be outside the fold of the taxable activity."

In view of the above Larger Bench answering question of law presented before it, held that except training or coaching falling in the exclusion category of all training or coaching falls under the definition of commercial training or coaching service, hence the same is taxable. In view of the Larger Bench judgment, the issue in hand in the present appeal is no longer res integra. Therefore the demand confirmed by the lower authority on merit is sustained. As regard the issue of limitation, we find that the appellants have neither declared the receipt nor of consideration towards commercial training or coaching, in their ST-3 Returns also not informed to the department otherwise. The appellant also did not make any effort to seek any clarification on such a important legal aspect. Therefore there is a clear suppression of fact on the part of the appellant. The present case was detected only on the independent investigation carried out by the departmental officer. The adjudicating authority in both the cases have given detail findings on limitation which is reproduced below:

Para 61 of OIO No. 21/PR. COMMR/ST-II/PK/2015-16 dt. 30.7.2016 in the case of M/s. National Institute of Construction Management & Research

"61. As regards the invocation of extended period of time, I observe that the law with regard to the tax liability of NICMAR was crystal clear as soon as the Explanation to Sec 65 (105) (zzc) was inserted with retrospective effect, i.e., from 1-7-2003) with effect from 1-4-2010. Hence, I believe that NICMAR ought to have come forward on their own in April 2010 itself to discharge tax liability for the past period of one year for the FY 2009-10, if not for the past five year period from FY 2005-06 onwards in order to prove their bona fides without waiting for the Dept to arrive at their doorstep to demand tax. On the contrary, I observe that NICMAR sought to avoid tax liability by indulging in hairsplitting in an attempt to cloak themselves in the garb of being (a) an educational institution recognized by law; (b) imparting vocational education courses; (c) being non-commercial in nature & so on & so forth. I also observe that though they insisted that they had bona fide belief that they were not liable to service tax, no attempt was made by them to approach the Dept at any point of time to get their stand clarified by the Dept. On the contrary, I observe that even after the initiation of investigations in July 2011 & being made aware of the changes in the law with retrospective effect during the course of the investigations in Oct 2011, they adamantly refused to discharge the tax liability for the past period under the pretexts stated above. The said approach of NICMAR only serves to prove that they contravened the provisions of service tax law with intent to evade payment tax. I thus hold that the proviso to Sec 73(1) was rightly invoked in the sow cause notice dt 5-4-2012.

Para 23 of OIO No. 34/P-III/ST/COMMR/2012-13 dt. 30.3.2013 in the case of M/s. MIT Institute of Design-

"23. Invocation of extended period for demand of duty beyond one year: 23.1 Having decided the issue of taxability, I now proceed to take up the Issue of applicability of extended period in the instant case. The relevant provision, i.e. Proviso to Sub Section (1) of Section 73 specifies, as below: "Provided that where any service tax has not levied or paid or has been short-levied or short-paid or erroneously refunded by reason of - (a) fraud; or (b) collusion; or (c) willfully mis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or of the rules made there under with Intent to evade payment of service tax, by the person chargeable with the service tax or his agent, the provisions of this sub-section shall have effect, as if; for the words "one year", the words "five years" had been susbstituted.

23.2 The service tax levy operates on a system of self assessment and the onus is always on the assessee to ensure correct payment of tax. I find that the levy was introduced w.e.f. 1.1.2003. 1 note that noticee was established in year 2006 as part of MAAERA, it is observed that they have neither taken registration under the Act or Rules, nor have they filed any ST-3 returns and not discharged the service tax liability. It was only after the Department took up the survey, did the facts about rendering the impugned service come to light. Despite repeated letters to them they failed to provide details of their activities and the amount of fees/charges recovered by them. They ought to have got themselves registered with the Department and discharged the tax liability under the appropriate taxable categories as soon as the services rendered by them became taxable, which they have failed to do. This failure can be construed as deliberate contravention of the provisions of the Act and Rues with a clear intent to evade the payment of Service Tax. The nature of the activities were also not disclosed to the Department until the Department took up the investigation. Therefore, there is sufficient reason to invoke the proviso to Sub Section (1) of Section 73 of the said Act for demanding service tax for the extended period, For the said reason they are also liable to pay interest under Section 75 and penalty under section 78 of the Act for their failure to pay Service Tax. Even if they were disputing the tax liability, they were required to obtain registration and file periodical returns containing details of the feits / charges recovered from their students, but they failed to do so. They were aware of their statutory obligations, but deliberately chose not to file any returns or submit any material information regarding the activities undertaken by them and the fees/charges recovered from their students and therefore they have suppressed the facts with the clear intention of evading payment of service tax. It is also observed that they have also thus contravened the provisions of Sections 68, 69 & 70 of the Finance Act, 1994 read with Rules 4, 6 & 7 of the Service Tax Rules, 1994 with the intent to evade payment of service tax.

23.3 In this regard, I also rely upon the decision of the Hon'ble CESTAT in the case of ETA Travel Agency Pvt. Ltd. V/s CCE, Chennai cited at: 2007 (7) S.T.R. 454 (Tri.-Bang), wherein the CESTAT held that:

"Thus it is evident that the appellants were aware of their service tax liability in respect of ORC received by them from Malaysian Airlines during the period of dispute. They had been receiving such payments through credit notes which mentioned the amounts in terms of Indian rupee and the money was realized in the same "currency. However, the appellants did not choose to get themselves registered with the department for payment of service tax o

Please Login To View The Full Judgment!

n ORC in the category of "Business Auxiliary Services". They did not file returns of this commission and did not pay service tax thereon. This conduct of the appellants invited action under Section 73(1)(a) of the Finance Act, 1994 inasmuch as the omission on the part of the appellants in filing return of ORC under Section 70 of the Finance Act, 1994 despite their knowledge of tax liability was evident to the Central Excise Officer authorised to take such action. We, therefore., hold that the extended period of limitation was rightly invoked against the appellants. 23.4 Applying the ratio of the above decision to the facts of the present case, it is held that the omission to get registered with the Service Tax department for the impugned service, and not paying the service tax and non filing of returns for the same during the material period is sufficient ground for invoking the extended period of limitation for demand of Service Tax. Therefore the proviso to Section 73 (1) is rightly invokable for the entire period. Hence the tax liability for the entire period is upheld." From the above detailed findings, it is seen that the appellants have suppressed the fact as well as contravened the provisions of this Chapter of the Act or of the Rules made under with intent to evade payment of service tax therefore the extended period was rightly invoked. Hence we uphold the invocation of extended period in both the appeals. As regard challenge to the quantification of the demand in the case of M/s. MIT Institute of Design on account of various deductions such as certain amount was not received during the impugned period, certain fees, such as postal's, mess/sale of goods etc. needs to be excluded from the taxable value and also on account of cum tax value. On going through the finding in this regard in the order-in-original, we find that the adjudicating authority has rejected this claim of the appellant on the ground that the statement of details was submitted at the time of personal hearing which was not supported by any connecting bills / invoices /receipt, therefore the same was not verifiable. We are of the view that once the appellant made a claim in their defence for deduction of taxable value. It is incumbent on the Commissioner to consider it, non consideration of the same is violation of the principles of natural justice. Therefore in our view the submission of the appellant challenging the quantification should have been properly dealt with by the adjudicating authority. The appellant also made a submission that the demand should also been adjusted by extending the cenvat benefit in respect of input service. Considering the above request of the appellant we remand the matter as regard quantification of demand in the case of MIT Institute of Design to the adjudicating authority for re-quantification on verification of all the documents/information / to be produced by the appellant. As regard the issue of penalty under Section 76,77 & 78, we find that the appellants have neither taken the registration nor filed the ST-3 return. It is also observed from the finding in Para 23 of the order-in-original as reproduced above, the appellants have contravened the provisions of Chapter of Finance Act, 1994 and Rules made there under with intent to evade payment of service tax. They could not make out a case of reasonable cause was not discharging the service tax. Accordingly the penalties was rightly imposed under the said Sections, we do not incline to interfere with. In result the following order is passed: (i) Appeal of M/s. National Institute of Construction Management and Research (NICMAR) bearing Appeal No. ST/87302/15 is dismissed. (ii) Appeal of M/s. MIT Institute of Design bearing Appeal No. ST/87596/13 is disposed of by way of remand to the adjudicating authority for re-quantification of demand and corresponding penalties as discussed hereinabove.
O R