DR. RACHNA GUPTA

None is present for the assessee-respondent. However, it is observed that the issue in the present appeal is no more res-integra, the same has been acknowledged by the learned DR that the issue stands already decided in favour of the assessee. However, the findings in the impugned order have been reiterated by the learned DR. Keeping in view the said submission, we proceed to decide the present appeal.

2. It is observed that the assessee-respondent herein, M/s Pandit Deendayal upadhyaya Shekhawati University (PDUSU) was engaged in granting affiliation to non-Government colleges under its jurisdiction in Rajasthan in lieu of consideration in the form of Affiliation Fee. It was observed that the assessee had not paid the service tax on the amount of affiliation fee received during the period 2016-17 and 2017-18 observing the said amount to be the consideration towards rendering a taxable service that show cause notice No. 12/2017-18 dated 23.07.2019 was served upon the appellant proposing the recovery of service tax amounting to Rs. 2,20,85,159/- along with interest and the proportionate penalties. The proposal of the show cause notice has been dropped vide the Order-in-Original No. 53- 2021-2022 dated 13.01.2022 observing that the services provided by the assessee are exempt from payment of service tax in terms of clause (a) of Entry 9 of Notificaiton No. 25/2012 dated 20.06.2012 and observing that there is no malafide mis-declaration or suppression of facts on part of appellants that too with an intend to evade payment of tax. The present appeal has been filed by the Department against the dropping of the entire demand.

3. The issue involved in the present appeal is: Whether the amount of affiliation fees received by the Education Institute is taxable.

4. The said issue, as acknowledged by the appellant/department, stands decided in favour of assessee//Education Institutes by the decision of Hon‟ble Karnataka High Court in the case of Rajiv Gandhi University of Health Sciences versus Principal Additional Director General, Directorate General of GST Intelligence¹2022 (141) taxmann.com 206 (Karnataka) wherein the Hon‟ble Karnataka High Court held as follows:-

“VIII. AS TO TAXABILITY OF INCOME FROM AFFILIATION AND ALLIED FUNCTIONS: (a) The University being a statutory body, accords affiliation to the health science colleges on the recommendation of the State Government. This is done under Section 45 of the RGUHS Act. Affiliation results into certain benefits/privileges; at the same time, it also makes the affiliated colleges to undergo certain supervision at the hands of the Syndicate. Section 48 provides for withdrawal of affiliation. Similarly, Section 46 provides for grant of recognition by the Syndicate to any institution of health sciences, even if it is situated outside the University Area. Such recognition can be withdrawn also under sub-Section (2). Grant or renewal of affiliation/recognition is subject to payment of specified fees, late fees & penalties. Learned counsel for the Appellant–Revenue argued that granting affiliation/recognition is a service as defined under clause(44) of Section 66B of the 1994 Act and therefore, the income accruing therefrom is liable to service tax. Learned Sr. Advocate representing the University repels this submission contending that the statutory activities of an entity that lack commercial elements do not answer this definition. Substantive part of Clause 44 reads as under: “Service” means any activity carried out by a person for another for consideration, and includes a declared service…” It is apparently a “means, includes & excludes” definition. It is not the case of either party that the exclusion part of the definition is invokable, and therefore a long list of exclusion is not reproduced.

(b) The substantive definition of „service‟ has four building blocks namely: “activity”; “carried out”; “by one person for another” and, “for consideration”. The