WP/28144/2007 of M/s. Pasha Educational Training Institute, Vs The Commissioner of Customs, on 31 December 2007

IN THE HIGH COURT OF JUDICATURE OFANDHRA PRADESHAT HYDERABAD

THE HON’BLE MRS. JUSTICE T.MEENA KUMARIAND

THE HON’BLE MS. JUSTICE G.ROHINI

WRIT PETITION NO.28144 OF 2007

Dated : December 31, 2007

Between:

M/s. Pasha Educational Training Institute,G-5, Pasha Court, 71, Greenlands Road,Panjaguta, Hyderabad, Rep.by its Chairman, Mr. Asadhulla Pasha Petitioner

AND

The Commissioner of Customs & Central Excise,Service Tax Cell, Hyderabad - II, Commissionerate, 3[rd] Floor, Shakkar Bhavan, Fatehmaidan Road, Hyderabad and another Respondents THE HON’BLE MRS. JUSTICE T.MEENA KUMARI

AND

THE HON’BLE MS. JUSTICE G.ROHINI

WRIT PETITION NO.28144 OF 2007

ORAL ORDER:(per THE HON’BLE MRS. JUSTICE T.MEENA KUMARI)

Seeking a writ of mandamus directing the Customs,Central Excise and Service Tax Appellate Tribunal,Bangalore, to dispose of the appeal filed by the petitioneragainst the order dated 31.08.2007 in Appeal No. 35 of2007 (H.H) Service Tax by the first respondentexpeditiously, the petitioner filed this writ petition.

The petitioner is a charitable educational trustformed with the object of imparting training/coaching invarious educational fields and they are not commercial innature. In furtherance of such object, it established PashaInstitute of Insurance & Management Training, PashaInstitute of Healthcare, Pasha Institute of Media Studies,Pasha Institute of Performing Arts and A.P.M.Kindergarten School. The petitioner is exempted frompayment of income tax.

While so, the petitioner received a notice dated23.01.2006 from the Joint Commissioner, Customs andCentral Excise, Hyderabad - II requiring the petitioner toregister itself with the Service Tax Authorities and tofurnish the details of month wise payments received forproviding services with effect from 1.7.2003 along with taxreturns for the corresponding years, to which the petitionerfiled reply dated 11.12.2006 claiming exemption frompayment of service tax, under various notifications.Subsequently, on 18.08.2006, a show cause notice was issued by the second respondent, calling upon thepetitioner to explain as to why an amount ofRs.28,02,950/- towards Service Tax and an amount ofRs.70,070/- towards Education Cess should not be leviedfor the period from July, 2003 to March, 2006, apart fromimposition of penalties and interest. The petitioner filedreply to the said notice on 19.9.2006, but the secondrespondent, dissatisfied with the submissions made bythe petitioner, passed an Order-in-Original No.6 of 2006dated 29.12.2006, holding that the services provided bythe petitioner are not covered by the Notification No.10 of2003 and that the activity of the petitioner falls within thedefinition of Commercial Training or Coaching and, hence,is liable for payment of tax and demanded an amount ofRs.38,02,950/- towards Service Tax, Rs.70,070/- towardsEducation Cess for the commercial coaching activity forthe period from 1.7.2003 to 31.3.2006 with interest on thesaid amount. A penalty of Rs.100/- per day until paymentof duty, penalty of Rs.1000/- for contravention ofprovisions of Finance Act, 1994 and also a penalty ofRs.38,73,020/- for suppressing the value of tax onservices, were levied. Aggrieved by the said order,petitioner herein preferred appeal being Appeal No. 35 of2007 before the first respondent and the first respondentvide order dated 31.8.2007 dismissed the same.Aggrieved thereby, the petitioner preferred appeal beforethe Customs, Central Excise and Service Tax Appellate Tribunal, Bangalore. Along with the appeal, the petitioneralso filed stay petition and subsequently, it also submitteda letter seeking early disposal of the appeal.

Heard the learned counsel for the petitioner and thelearned Asst. Solicitor General of India.

The learned counsel for the petitioner submitted thatthe fact that the petitioner is a Charitable Trust and is notcarrying on the activity on commercial lines, is notappreciated by both the original and appellate authoritiesin correct perspective and therefore, the finding that thepetitioner falls within the ambit of Commercial Coachingand Training under Sec.65(27) of the Finance Act, 1994cannot be sustained.

While the learned Asst. Solicitor General of India,vehemently opposed the prayer of the petitioner.

Having regard to the facts and circumstances of thecase and having heard both the counsel, we feel that theends of justice would be met, if stay of recovery of thedemanded tax is granted subject to the condition of thepetitioner depositing half of the demanded amount.Accordingly, there shall be stay of recovery of thedemanded amount on the condition of the petitionerdepositing half of the demanded amount within a period ofeight weeks from today. The Tribunal is directed todispose of the appeal preferred by the petitioner within a period of six months from the date of receipt of a copy ofthis order.

With these directions, the writ petition is disposed of.No order as to costs.

____________________T.MEENA KUMARI, J.

December 31, 2007MAS.

____________G.ROHINI, J.