Customs, Excise & Service Tax Appellate Tribunal, Allahabad: In an appeal filed against the order passed by the Commissioner (Appeals), CGST, Noida, a Single Judge Bench of P.K. Choudhary (Judicial Member) noted that the appellant-SKY Lark Education Welfare Society was providing vocational education under programme approved by National Urban Livelihood Mission, which were based on curriculum approved by Uttar Pradesh Government. The Tribunal held that the appellant would be treated as educational institution as per the definition given under Clause (oa) of Notification No.25/2012-ST, dated 20-6-2012 issued by the Ministry of Finance, Government of India. Thus, the services provided by the appellant would be exempted from service tax under Clause (9) of the Notification.
Background
The appellant was registered with the Central Excise & Service Tax Department for providing taxable services. On receipt of data/information from Income Tax Department, a substantial difference between gross value of services declared in returns filed by the appellant for 2016-17 and total amount declared in Income Tax Return for the same period was observed, and it was found that the service tax was not paid by the appellant.
A demand cum Show Cause Notice was issued proposing to demand service tax of Rs. 17,62,641 along with interest at applicable rates in terms of Sections 73(1) and 75, respectively, of the Finance Act, 1994 (‘Finance Act’). Penalties under Sections 77(10)(c) and 78 of the Finance Act were also proposed against the appellant. The Show Cause Notice was challenged by the appellant on ground that services provided by them were exempted from payment of service tax in terms of Notification No.25/2021-ST dated 20-6-2012. The Adjudicating Authority accepted the submissions made by the appellant except for the services provided to Swami Vivekanand Subharti University (‘the University’) under Distant Education Programme for a value of Rs. 9,90,000 and it confirmed the demand of service tax for Rs.1,48,500 along with interest at applicable rate under Sections 73(1) and 75 of the Finance Act and also imposed penalties under Sections 77(1)(c) and 78 of the Finance Act.
The appellant and Principal Commissioner, CGST, Noida filed an appeal before Commissioner (Appeals), CGST, Noida challenging the order of Adjudicating Authority. The Commissioner (Appeals), CGST passed the order enhancing the demand of service tax and confirmed penalties Sections 77(1)(c) and 78 of the Finance Act. Being aggrieved, the appellant further challenged the order before the Tribunal.
Analysis, Law and Decision
The issue for consideration was “whether exemption granted under Notification No. 25/20212-ST dated 20-6-2012 would be available to the appellant?”.
The Tribunal noted that Clause (9) of the Notification provided exemption to an educational institution who provided services to its student, faculty, and staff. The Tribunal also noted that the appellant had been imparting education to the students of the University, enrolled under the distant learning programme, as per the curriculum provided by the University and it was duly recognized under the laws of the Uttar Pradesh Government/UGC. For such services provided by the appellant, the University had been paying some fees to the appellant. Therefore, the appellant had been working as an educational institution during the relevant period. Thus, services provided by the appellant were held to be exempted from service tax.
The Tribunal, in relation to the services given by the appellant towards Distant Learning to the students of the University, relied on the case of Asian School of Media Studies v. Commr. (CGST), 2024 SCC OnLine CESTAT 2257, wherein the Tribunal had held that services provided for imparting education as per curriculum of a university who issued qualification certificate was exempted from service tax. Thus, the demand of Rs. 1,48,500 on account of consideration received for distance learning fee was not sustainable and was liable to be set aside.
The Tribunal further noted that the appellant was providing vocational education to urban youth under programme approved by National Urban Livelihood Mission, which were based on curriculum approved by Uttar Pradesh Government. Thus, it would be treated as educational institution in the light of definition given under Clause (oa) of Notification No.25/2012-ST, dated 20-6-2012 issued by Ministry of Finance, Government of India and services provided would be exempted from service tax under Clause (9) of the Notification. The Tribunal further held that the demand of service tax confirmed on services rendered by the appellant on consideration received by the National Urban Livelihood Mission was not sustainable. The Tribunal, allowed the appeal, set aside the order of Commissioner (Appeals) CGST, Noida and held that no penalty would be leviable.
[SKY Lark Education Welfare Society v. Commr. (CGST), Service Tax Appeal No. 70576 of 2024, decided on: 29-8-2025]
Advocates who appeared in this case:
For Appellant(s): Stuti Saggi, Advocate
For Respondent(s): A.K. Choudhary, Authorised Representative
