2010 (8) TMI 245 - AT - Service Tax

Waiver of pre-deposit - demand of service tax from the appellants for having rendered taxable service falling under the category Commercial Training or Coaching Centre - appellant imparting communication skill in English was a Foreign Language Institute and a Vocational Training Institute - appellant entitled to exemption under Notification No. 9/2003-S.T as amended by Notification No. 24/2004-S.T - conclusion of the Commissioner that English is not a foreign language not correct - waiver of pre-deposit of the dues confirmed against the appellants pending decision in the appeal.

Summary

Issues:
1. Whether the activities of the appellant are entitled to exemption under Notification No. 9/2003-S.T. as a Foreign Language Institute and Vocational Training Institute.
2. Whether the appellants are liable to pay service tax for imparting communication skills in English.

Analysis:
1. The impugned order revised the original authority's decision, which had dropped the demand of service tax from the appellants for providing taxable services under the category of "Commercial Training or Coaching Centre" as per Section 65(27) of the Finance Act, 1994. The Adjudicating Authority had initially dropped the demand, considering the appellant as a Foreign Language Institute and a Vocational Training Institute, eligible for exemption under relevant notifications. However, the Commissioner, in the impugned order, disagreed, stating that English is not a foreign language and is spoken widely in India. Consequently, the Commissioner confirmed the demand of Rs. 3,21,239/- as proposed in the show cause notice.

2. The Appellate Tribunal, after hearing both sides, expressed its disagreement with the Commissioner's conclusion that English is not a foreign language. The Tribunal found that the appellants' activities might still be entitled to exemption under the relevant notifications. Therefore, the Tribunal ordered the waiver of pre-deposit of the dues confirmed against the appellants pending the final decision in the appeal. The Tribunal's decision indicates a differing interpretation from the Commissioner's stance on the issue of whether English can be considered a foreign language in the context of service tax liability.