2017 (2) TMI 1220 - AT - Service Tax

Exemption under N/N. 9/2003- ST and 24/2004 -ST - vocational training institutes - Held that - N/N. 9/2003 and 24/2004 exempts vocational training institutes from payment of Service Tax under tax entry commercial training or coaching . Vocational Training Institute means a commercial training or coaching centre which provides vocational coaching or training that impart skills to enable the trainee to seek employment or undertake self-employment directly after such training or coaching - Admittedly the appellants are engaged in providing coaching in English French and German language skills. Training included improving the skills of pronunciation manner of speaking etc. The original authority recorded that this sort of training imparted by the appellant helps in getting employment for the participant in Multi National Companies and various Corporations/Institutions where improved particular skill in speaking is a required qualification - appeal allowed - decided in favor of appellant.

Summary

Issues:
Entitlement of exemption from Service Tax for vocational training institutes providing English and other language coaching.

Analysis:
The case involved a dispute regarding the appellants' entitlement to exemption from Service Tax for providing English and other language coaching to students, as per Notification No. 9/2003-ST and 24/2004-ST. The original authority had initially held the appellants eligible for exemptions, except for a specific period when no exemption was available. However, on appeal by the Revenue, the Commissioner (Appeals) ruled that the appellants were not eligible for the said exemptions, stating that coaching in English could not be considered vocational training.

The appellant's counsel argued that the nature of training provided, not the status of English language, was crucial for determining exemption eligibility. They contended that coaching in English directly led to employment opportunities or self-employment for participants. The appellant relied on a Tribunal decision in a similar case to support their argument.

Upon hearing both sides and reviewing the records, the Tribunal observed that the appellants offered coaching in English, French, and German language skills, which included improving pronunciation and speaking skills. The original authority had noted that such training helped participants secure employment in multinational companies and other institutions requiring specific speaking skills. The Tribunal agreed with these findings and emphasized that the focus should be on the nature of coaching provided, not the language's status.

The Tribunal found that the impugned order had erroneously delved into discussions on the status of English in India, which was irrelevant to determining taxability under commercial coaching or training. The Tribunal concluded that the legal issue examined in the impugned order was misdirected and set it aside. Relying on a previous Tribunal decision, the Tribunal allowed the appeal, stating that the original order correctly applied legal provisions to the case.

It was clarified that the appellants' liability during a period without exemption notification was not in dispute, highlighting that the exemption eligibility was the central issue in the case.