Gupta Academics Pvt. Ltd vs C.C.E., Kanpur

Arising out of the order in appeal No.247-CE/APPL/KNP/2009 dated 16.9.2009 passed by the Commissioner (Appeals), Customs, & Central Excise, Kanpur.

For approval and signature:

Honble Mr. Justice G. Raghuram, President

Honble Mr. H.K. Thakur, Technical Member

1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

Gupta Academics Pvt. Ltd. . Appellants

Vs.

C.C.E., Kanpur .. Respondent

Appearance:

None for the appellants

Present Shri Govind Dixit, A.R. for the Respondent/Revenue

Coram: Honble Mr. Justice G. Raghuram, President

Honble Mr. H.K. Thakur, Technical Member

Final Order No. 52157/2015

Per Justice G. Raghuram:

There is no representation on behalf of the appellant. Heard the ld. A.R. for Revenue. Notice of hearing of the appeal was dispatched to the appellant and the Consultant Shri Rakesh Kumar Jain, on 15.6.2015. In the circumstances, the appeal is being disposed of ex-parte.

2. The appellant is the assessee. The appeal is preferred against the order dated 16.9.2009 passed by the Commissioner (Appeals), Customs and Central Excise, Kanpur. The impugned order dropped penalties under Sections 76 and 78 of the Finance Act, 1994 and confirmed the balance of the demand of service tax and penalties , as assessed by the primary adjudication order dated 13.3.2006 of the Assistant Commissioner of Central Excise and Service Tax, Agra.

3. Proceedings were initiated on the premise that appellant had provided commercial training and coaching service 1.7.2003 onwards; but failed to remit service tax on admission fee collected prior to 1.7.2003.

4. Since there are concurrent findings on the liability of the appellant regarding its obligation to remit tax on admission fees collected by it prior to introduction of the taxable service, we summarise the reasons recorded by the ld. Appellate Commissioner for sustaining the levy. The ld. Appellate Commissioner observeed that if the admission fees would not have been charged then the appellant would not have been able to entertain students and collect monthly fees from them for imparting coaching; therefore, admission fees has a bearing on the coaching service provided later on; that the Tribunal in Krishna Coaching Institute  2009 (19) STT 486 and P.T. Education & Training  2009 (20) STT 246 had also ruled that in cases where a consideration was received in advance and the relevant service was notified to become taxable on a later date, the amount collected should be apportioned on monthly/quarterly basis and tax remitted accordingly; and therefore levy and collection of service tax proportionate to the period when the present service became taxable out of the advance collected prior to that date, is leviable.

5. We disagree with the concurrent findings recorded by the authorities below. The principle is well established and is constitutionally enshrined, that levy and collection of tax requires legislative authority (Article 265). The legislation should clearly express and identify the taxable event, the rate of tax and the person on whom the liability falls. Admittedly, Commercial Coaching or Training was enacted to be a taxable service with effect from 1.7.2003. Therefore, rendition of this service, on and after 1.7.2003, is the taxable event. The inherence of service tax is normally on the provider of the service. There is no dispute about the rate of tax. The consideration liable to tax under Section 67 of the Act is for rendition of services defined and enumerated to be taxable.

6. The consideration that is alleged to have escaped tax in this case is the admission fees collected by the appellant prior to 1.7.2003. This is not term fee/tuition fee or a fee collected by the appellant for providing the taxable service i.e. Commercial Coaching or Training. As pointed out by the ld. Appellate authority in para 10 summarised above, admission fee is the fee collected for ensuring reciprocal obligations, i.e., the appellants obligation to admit students who remit this fee for the relevant courses of study and the corresponding obligation of students who undertake the courses for which admission fee is remitted. Admission fee, remitted prior to the date of introduction of the taxable service cannot therefore be considered as receipt of a consideration for rendition of Commercial Coaching or Training.

7. Decisions of the Tribunal in Krishna Coaching Institute and P.T. Education & Training (supra) are in cases where consideration received was towards term fee i.e. for imparting courses of instruction. The Tribunal ruled that terms fee collected in advance should be apportioned for the period for which such courses of instruction were provided after the service was made taxable by the provisions of the Act. These decisions do not empirically support the conclusion recorded, since the essential character of an admission fee and term fee is distinct and dissimilar.

7. For the aforesaid reasons, we allow the appeal and quash the impugned order. No order as to costs.

andl

(Justice G. Raghuram)

President

(H.K. Thakur)

Technical Member

scd/

1