Indian Institute Of Planning Managemant vs Commissiner Of Service Tax, Delhi

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This appeal has been preferred by the Indian Institute of Planning and Management, under section 83 of the Finance Act, 1994 read with section",,,,

35G of the Central Excise Act, 1944, against the dismissal of its application on 8th March, 2019, by the Customs, Central Excise and Service Tax",,,,

Appellate Tribunal, New Delhi (CESTAT), preferred for rectification of mistake in the Final order and judgement dated 20th March, 2018, whereby,",,,,

the benefit of the extended period was denied on the ground that the Appellant had not invoked the plea, or that it was a registered as a not-profit",,,,

organization under the Societies Registration Act, 1860.",,,,

The appellant-assessee is a society situated in Chhatarpur pahadi, New Delhi and is registered under the Societies Registration Act, 1860, who",,,,

conducts various management courses.,,,,

On 10th February, 2006, the Directorate General Central Excise Intelligence issued a Show Cause Notice to the appellant alleging that the appellant",,,,

was evading the payment of Service Tax on the fees collected for the various academic and training courses under the category of “Commercial,,,,

Training and Coaching Servicesâ€​.,,,,

The Show Cause Notice was finally adjudicated by the respondent vide Order-in-Original dated 24th January, 2012, by Commissioner, Service Tax",,,,

Commissionerate, New Delhi, confirming the demand of Service Tax, along with interest and penalties to the extent of Rs. 8,08,000/-.",,,,

Consequently, post the order of review preferred by the appellant-assessee, the Respondent preferred an appeal before the CESTAT, while the",,,,

appellant-assessee filed its cross-objections against the confirmation of demand.,,,,

It is averred that during the course of arguments before the CESTAT, the revenue and the appellant-assessee submitted their written statements on",,,,

8th and 12th March, 2018 respectively, and on the 20th March, 2018 the appeal by the revenue was allowed by the CESTAT, to the extent of the",,,,

dropped Service Tax demand along with the interest and penalties.,,,,

The relevant portion of the final order of the CESTAT is reproduced hereinbelow:,,,,

“14. The next issue for consideration is whether extended period of time could be invoked in the present case for confirmation of Service Tax,,,,

demand. Revenue has relied on the Tribunal decision in the case of Unitech Southcity Educational Charitable Trust and others. In the said decision the,,,,

appellant in that case was held to be liable for payment of Service Tax under the category of ""Commercial Training or Coaching Centre"" for the",,,,

reason that the courses being run lead to a Degree by the Foreign University but the demand was restricted to normal time limit. The reason cited in,,,,

the order for such restriction is the retrospective amendment carried out by the Finance Act, 2010 in the definition of Section 65 (27) wherein an",,,,

Explanation"" was inserted w.e.f. 01/07/2003. The Explanation is relevant only in respect of a ""Commercial Training or Coaching Centre"" which is",,,,

registered as an Organization carrying out activity without profit motive. In the facts of the present case this aspect of IIPM is not in debate.T his plea,,,,

has neither been taken before the Adjudicating Authority nor before us. Consequently, we are of the view that the case of M/s Unitech Southcity",,,,

Educational Charitable Trust and others is distinguishable to this extent from the facts of the present case.,,,,

It is on record that IIPM neither took registration nor registered themselves with Department up to 22/07/2005. On the said day the registration,,,,

was taken only at Bangalore even though IIPM has Institutes in many other places. They also did not pay any Service Tax or file ST-3 Returns even,,,,

though the tax on Commercial Training or Coaching Centre was levied w.e.f. 01/07/2003. Since they have failed to obtain registration or file returns or,,,,

even intimate the Department of the activities undertaken, the Department is fully justified in issuing show cause notice to demand of Service Tax",,,,

along with interest by invoking the extended period of time.,,,,

In view of the above discussions we find that Adjudicating Authority has erred in dropping the demand of the Service Tax by considering the,,,,

activities as falling outside the scope of Commercial Training or Coaching Centre. For the reasons set out above we conclude that the impugned order,,,,

is not sustainable. We set aside the impugned order to the extent of dropping of Service Tax demand and uphold the entire demand of Service Tax,,,,

raised in the show cause notice dated 10/02/2006. Such demand will be payable along with interest under Section 75. IIPM will also be liable to pay,,,,

penalty equal to the Service Tax demanded under Section 78 as well as under Section 77 of the Finance Act, 1994. Since penalty under Section 78 is",,,,

upheld, we do not impose penalty under Section 76.â€​",,,,

(Emphasis supplied),,,,

Aggrieved by the observation of the CESTAT in the final order dated 20th March, 2018 that the plea invoking the extension of time period had not",,,,

be taken since it was neither contended before the adjudicating authority nor the CESTAT, the appellant-assessee preferred a rectification of mistake",,,,

application, under Section 35C of the Central Excise Act, 1944, on 13th September, 2018.",,,,

This rectification of mistake application was dismissed by the CESTAT vide the impugned order dated 8th March, 2019, while holding that the",,,,

scope of rectification of mistake was limited. The findings of the CESTAT merit reproduction as under:,,,,

“7. By means of this ROM, the appellant has advanced detailed arguments against the final order. It has been submitted that the appellant is not",,,,

conducting training programmes leading to MBN BBA degree of the international Management Institute, Europe. The words appearing in para 2 of",,,,

the order does not lead to such finding. Hence we find no need for carrying out any correction.,,,,

The appellant appears to be aggrieved by the findings of the Tribunal not restricting the demand, to the normal time limit which was extended in the",,,,

decision in the case of M/s Unitech South City. It has also been submitted in this case that the appellant was a Society registered under the Society,,,,

Registration Act, 1860 and were availing the exemption under Section 10(23c) of the Income Tax Act.",,,,

We have considered the arguments advanced by both sides on this issue. The decision of the Tribunal not to extend the benefit of bonafide belief in,,,,

the lines of the decision in case of M/s Unitech has been taken after due deliberation and consideration of the entire record of the case. If the,,,,

appellant is aggrieved with such finding, the right course of action would to be to challenge the order in the appropriate appellate forum.",,,,

We note that the scope of the rectification of the mistakes application is very limited. Only mistakes which are apparent on the face of the record,,,,

and which do not require long drawn process of arguments by both sides, may be rectified. It is well settled law that applicant cannot seek review of",,,,

the order in the guise of rectification of mistakes. This view finds support in the decision of Hon'ble Supreme Court in case of Commissioner of,,,,

Central Excise Kolkata vs. ASCU Ltd. reported in [2003(151) ELT (481) (SC)]. Further, such views are to be found in the decision of the Apex",,,,

Court in case of Commissioner of Central Excise, vs RDC Concrete: India Pvt. Ltd. reported in [20 11(270) ELT 625(SC)], as also in case of Honda",,,,

Power Products vs. Commissioner of Income Tax, Delhi [2008(221)ELT(11) (SC)].â€​",,,,

“S.

No.",Nature of document,"Relevant

par a no.","Relevant

page no.

(internal)",Extract of the relevant portion

1.,Show cause notice,,,"M/s. THE INDIAN INSTITUTE OF PLANNIN

MANAGEMENT, a society registered undert he

Societies' Registration Act, 1860, having institute/branch

at IIPM TOWERS, 145, RUKMAN

LAKSHMIPATHY SAL AI (MARSHALL'S ROA

EGMORE, CHENNAI6-0 0008 and Head Office and

Institute at IIPM towers, B- 27, QutubI nternational

Area, NEW DELHI110016.

2.,Show cause notice,3.4,2,"3 . 4 M/s. IIPM vide their Letter date

05/09/2005,addressed to the Assistant Director, DGCEI

Chennai stated, inter alia, that they furnished a copy of

Letter dt.25/7/2005 of M/s. Amarchand & Mangaldas

& Suresh Shroff & CO., counsel for IIPM, addresse

to the Superintendent, Commissionerate of the service

tax, Bangalore, wherein they stated that IIPM is a non

profit making Educational Institute registered under the

Societies' Registration Act, 1860 to impart training and

research on TechnoEconomic and Socio- Economic

Planningand Management; that IIPM teaches Plannin

and entrepreneurship course for self employment though

the students accept employment in other organizations

through campus interview organizedby IIPM and thus

IIPM claimed that their courses are vocational courses

In that Letter IIPM further stated that IIPM have bee

granted necessary exemption under Sec. 10 (23) (c) of

the Income Tax Act, 1961;·that IIPM is neither

commercial training center nor a commercial coaching

center; that IIPM not assessable under Service Tax;

that IIPM enjoys a national as well as Internationa

reputation and is widely regarded as one of the foremost

educational institutes in the country as on date; that the

issues whether IIPM is liable to pay Service Tax is yet

to be adjudicated upon. In their letter dt. 05/09/2005,

IIPM categorically stated that they do not have an

course affirmation with any Universities/ approval form

AICTE.

3..,Show cause notice,7.5,16,"Moreover in the letter dt. 25/7/2005 of M/s

AMARCHAND MANGALDAS& SURE

SHROFF & CO, COUNSEL for IIPM, (enclosed alo

with IIPM letter dt. 05/9/2005 - stated that IIPM is a

non-profit making educational institute registered under

Societies Registration Act, 1860 to impart training and

research self-employment.

4.,Show cause notice,7.7,16,"From the foregoing, it appeared that IIPM is conductin

commercial training and conducting commercial training

or coaching service is taxable. They are claiming that

they are nonprofit oriented Society Registered under the

Societies Act , 1860 and enjoying exemption under the

Income Tax Act,1961. Enjoyment of exemption under

the Income Tax Act, is no way concerned with the

services rendered by IIPM on COMMERCIAL bas

as the income tax and service tax are two different

taxes governed by different statutes providing different

conditions and exemption. Exemptions under one statute

ipso facto dose not lead to exemption under different

statute providing different conditions and exemption.

Exemptions under one statute ipso facto dose not lead to

exemption under different statute.

5.,Show cause notice,8.1,17,"The investigation carried out has appeared to reveal the

following: (a) IIPM, is a society registered under the

Societies Registration Act, 1860, are engaged in

conducting various academic educational courses

6.,Order-inOriginal dt. 24.01.2012,,4,"M/s. THE INDIAN INSTITUTE OF PLANNIN

MANAGEMENT, a society registered undert he

Societies' Registration Act, 1860, ·having

institute/branch at IIPM TOWERS, 145, RUKMAN

LAKSHMIPATHY SAL AI (MARSHALL'S ROA

EGMORE, CHENNAâI€ " 600008 and Head Office

and Institute at IIPM towers, B- 27, QutubI nternational

Area, NEW DELHI110016

7.,Order-inOriginal dt. 24.01.2012,3.4,5,"3 . 4 :M/s. IIPM vide their Letter date

05/09/2005,addressed to the Assistant Director, DGCEI

Chennai stated, inter alia, that they furnished a copy of

Letter dt.25/7/2005 of M/s.Amarchand & Mangaldas &

Suresh Shroff & CO., counsel for IIPM, addressed t

the Superintendent,Commissionerate of the service tax,

Bangalore, wherein they stated that IIPM is a non-profi

making Educational Institute registered Under the

Societies' Registration Act, 1860 to impart training and

research on Techno Economic and Socio-Economic

Planning and Management;that IIPM teaches Plannin

and entrepreneurship course for selfemployment, though

the students accept employment in other Organizations

through campus interview organized by IIPM and thus

IIPM claimed that their courses are vocational courses

In that Letter IIPM further stated that IIPM have bee

granted necessaryexemption under Sec. 10 (23) (c) of

the Income Tax Act, 1961 ; that IIPM is neither a

commercial training center nor a commercial coaching

center; that IIPM not assessable under Service Tax;

that IIPM enjoys a national as well as international

reputation and is widely regarded as one of the foremost

educational institutes in the country as on date; that the

issues whether IIPM is liable to pay Service Tax is ye

to be adjudicated upon. In their letter dt. 05/09/2005,

IIPM categorically stated that they do not have an

course affirmation with any Universities/ approval form

AICTE.

8.,Order-inOriginal dt. 24.01.2012,7.4,17,"Moreover in the letter dt. 25/7/2005 of M/s

AMARCHAND MANGALDAS& SURE

SHROFF & CO, COUNSEL for IIPM, (enclosed alo

with IIPM letter dt. 05/9/2005 - stated that IIPM is a

non-profit making educational institute registered under

Societies Registration Act, 1860 to impart training and

research self-employment.

9.,Order-inOriginal dt. 24.01.2012,7.6,18,"From the foregoing, it appeared that IIPM is conductin

commercial training 2 and conducting commercial

training or coaching service is taxable. They are

claiming that they are non-profit oriented Society

Registered under the Societies Act , 1860 and enjoying

exemption under the Income Tax Act,1961. Enjoyment

of exemption under the Income Tax Act, is no way

concerned with the services rendered by IIPM o

COMMERCIAL basis, as the income tax and servic

tax are two different taxes governed by different

statutes providing different conditions and exemption.

Exemptions under one statute ipso facto dose not lead to

exemption under different statute.

10.,Order-inOriginal dt. 24.01.2012,V,12,"IIPM is not a commercial organization i.e. training or

coaching centre but a non- profit organization. In order

to levy tax in the category of commercial training or

coaching services, it is not sufficient that the institution

is providing coaching or training. It Is incumbent on the

Department to prove that the institution is providing

commercial training or coaching, which means that the

coaching or training to provided as a business, activity

i.e.for the purpose of making profit. The evidence on

record fails not only to prove that IIPM are not engage

in providing coaching or training, it also fails to show the

activities of IIPM are directed towards profit making. I

is on record that IIPM is a society Registered unde

Section 10 (23C) of the Income Tax Act. Under Section

10 (23 C) exemption is available to educational

institutions existing solely for education purposes and not

for the purpose of profit.

11.,Order-inOriginal dt. 24.01.2012,17.8,65,"The admitted facts on record by both the department

and the Noticee are as follows:- The Noticee is a

society registered under the Societies Registration Act,

1860 having branch offices at several locations and

Head Office in New Delhi.

12.,Order-inOriginal dt. 24.01.2012,Viii,66,"That the Noticee is a society registered under the

Societies Registration Act, 1860 and is conducting

private courses. The notice was established in 1973 as

non-profit making educational institute under the said

Act.

In view of the order passed in the appeal, this application is disposed of.",,,,