M/S. Thanjai Study Centre vs Cce, Trichy

(Arising out of Order-in-Appeal No. 164/2010 dated 15.10.2010; Order-in-Appeal No. 210/2010 dated 15.12.2010; Order-in-Appeal No. 131/2012 dated 30.6.2012 and Order-in-Appeal No. 219/2012 dated 12.9.2012 passed by the Commissioner of Central Excise (Appeals), Tiruchirappalli)

M/s. Thanjai Study Centre Appellant

Vs.

CCE, Trichy Respondent

Appearance

Shri N.K.Bharath Kumar, CA for the Appellant Shri L. Paneerselvam, AC (AR) for the Respondent

CORAM

Honble Shri R. Periasami, Technical Member Honble Shri P. K. Choudhary, Judicial Member

Date of Hearing: 23.07.2015 Date of Pronouncement:24.08.2015

Final Order No. 41001-41004 / 2015

Per P.K. Choudhary

All the four appeals are taken together as the issues are common and identical in nature.

2. The adjudicating authority has confirmed the demand of service tax under commercial coaching and training under Section. 73(2) of Finance Act, 1994. Commissioner (Appeals) has upheld the order.

3. Ld. Consultant for the appellant submits that they are providing distant education as per the agreement between Alagappa University, Karaikudi & Periyar University, Salem and the coaching is offered as per the University Curriculum and the students appear for examination and the degrees are awarded by the respective Universities. He drew attention to MOU dt.1.5.2009 signed between Alagappa, Karaikudi Universities and the appellant. They have no direct role and is controlled by the universities. Accordingly, both curriculum and fees are decided by the university as per the agreement. He submits that this issue has already been settled by various orders of the Tribunal. One of such order is reported in 2010-TIOL-1753-CESTAT-MAD in the case of JMC Educational Charitable Trust Vs CCE Trichy and also in the case of Trichy Institute of Management Studies (P) Ltd. Vs CCE Trichy  2011-TIOL-789-CESTAT-MAD and Trichy Institute of Management Studies (P) Ltd. Vs CCE Trichy  2011-TIOL-1521-CESTAT-MAD.

4. On the other hand, Ld. AR reiterated the findings of the adjudicating authority in para 10 of the OIO. He submits that as per Notification No.10/2003-ST dt. 20.6.2003, exemption is not applicable and the charges are paid by the person directly to the centre in this case. Charges are collected by appellant. He submits that department has already filed appeal against Tribunal's order in the case of JMC Educational Charitable Trust (supra). He relied the citation of Great Lakes Institute of Management Ltd. Vs CST Chennai - 2013 (32) STR 305 (Tri.-LB).

5. In counter, ld. consultant submits that Tribunal's Larger Bench decision is not applicable to their case and they are not rendering commercial coaching and they are directly under the control of universities. He drew our attention to para 3 of the Tribunals order in the case of Trichy Institute of Management Studies (P) Ltd. Vs. CCE, Trichy (supra).

6. We have heard both sides and on perusal of the records and also the decisions as cited above, we find that the appellants claims that the Institution run by them is like a parallel college and the students are obtaining degrees from Alagappa University at Karaikudi and Periyar University at Salem through the distant education programme is supported by the memorandum of understanding submitted by them. The Kerala High Courts decision in the case of Malappuram Distt. Parallel Colleges Association Vs. Union of India  2006-TIOL-35-HC-KERALA-ST has held that the provisions of Finance Act, 1994 authorising levy of service tax on parallel colleges are arbitrary and violative of Article 14 of the Constitution of India. It has also been held by the Honble Kerala High Court that levy of service tax for services rendered by parallel colleges, which indirectly falls on students but while simultaneously provided exemption to regular affiliated college allowing students therein to study free of tax, is patently discriminatory and violative of Article 14 of the Constitution. Following the decision of the Honble High Court of Kerala in the case of Malappuram Distt. Parallel Colleges Association Vs. Union of India (supra), the Tribunal in the case of Trichy Institute of Management Studies (P) Ltd. Vs. CCE, Trichy  2011-TIOL-789-CESTAT-MAD held as follows:-

3. The identical issue in the case of the same assessee came up before the Tribunal as mentioned herein above and the Tribunal has held as follows :-

4. We have considered the arguments advanced on behalf of the appellants. Their claim that the institution run by them is like a parallel college and that the students are obtaining degrees from the Alagappa University through the Distance Education Programme is supported by the Memorandum of Understanding submitted by them. We have perused the decision of the Hon'ble Kerala High Court in the cited case of Malappuram Distt. Parallel College Association (supra). It has been held by Hon'ble Kerala High Court in the cited case that the provisions of the Finance Act, 1994 authorizing levy of service tax on parallel colleges are arbitrary and violative of Article 14 of the Constitution of India. It has also been held by the Hon'ble Kerala High Court that levy of service ax ( sic) for services rendered by parallel colleges, which indirectly falls on students, but by simultaneously providing exemption to regular affiliated colleges allowing students therein to study free of tax, is patently discriminatory and violative of Article 14 of the Constitution of India.

5. Following the ratio of the cited decision of the Hon'ble Kerala High Court, which has been followed by the Tribunal in the case of JMC Educational Charitable Trust vs. CCE, Trichy vide Final Order No. 1027 dated 23.9.2010, we are of the view that the levy of service tax in respect of the training and coaching provided by the appellants which form an essential part of a course or curriculum of a university, leading to issuance of certificate or diploma or degree to the students recognized by law is not justified, even though the same is obtained by the students of the institution run by the appellants through Distance Education Programme. Hence, the impugned order is set aside and the appeal is allowed.

7. Respectfully following the decision of the Honble Kerala High Court in the case of Malappuram Distt. Parallel Colleges Association Vs. Union of India (supra) which has been followed by the Tribunal in the cases of Trichy Institute of Management Studies (P) Ltd. (supra), M/s. JMC Educational Charitable Trust Vs. CCE, Trichy (supra), JMC Educational Trust Vs. CCE, Trichy  2011-TIOL-410-CESTAT and Trichy Institute of Management Studies (P) Ltd. Vs. CCE, Trichy  2011-TIOL-1521-CESTAT, we are of the view that the levy of service tax in respect of training and coaching provided by the appellants which form an essential part of a course or curriculum of a University, leading to issuance of certificate or diploma or degree to the students recognized by law is not justified. Accordingly, the impugned orders are set aside and the appeals are allowed with consequential relief, if any.

(Pronounced in open court on 24.8.2015)

(P.K. CHOUDHARY) (R. PERIASAMI) Judicial Member Tehnical Member

Rex

5