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Commercial training or coaching services — Parallel colleges, liability — Levy in respect of training and coaching which forms essential part of course, leading to issue of degrees, etc., not justified — Section 65(27) of Finance Act, 1994.
Facts:
The assessee was conducting classes for students enrolled in distance education programme of Alagappa University. The appellant contended that the coaching classes being in the nature of parallel colleges should be exempted from the payment of service tax. Further, as per the MOU executed between the Alagappa University and the institution run by the appellant, the institution was recognised as a centre for enrolling candidates for distance education programmes. The case of Malapuram Distt. Parallel College Association v. Union of India, 2006 (2) STR 321 (Ker.) was cited in support.
Held:
Applying the ratio of the High Court judgment in case of Malapuram Distt. Parallel College Association v. Union of India, 2006 (2) STR 321 (Ker.), it was held that service tax was not to be levied in respect of training and coaching provided by the appellant. Although it formed an essential part of the course or curriculum of a university leading to issuance of certificate or diploma or degree to the students recognised by law, is not justified to be commercial coaching. The appeal was allowed accordingly.
(2011) 22 STR 539 (Tri.-Bang.) — Mphasis Ltd. v. Commissioner of Central Excise, Bangalore.
