2011 (1) TMI 833 - AT - Service Tax

Abacus coaching - appellants are engaged in the activity of coaching children basing on the ancient Japanese methods of mathematical calculation with the help of an instrument popularly known as Abacus - the dispute stands decided in favour of the assessee vide our decision in the case of Fast Arithmetic Vs. Asst. Commissioner of C. Ex. & S. T., Bangalore as reported in (2009 -TMI - 34931 - CESTAT, BANGLORE) - Notification No. 9/2003-S.T., dated 20-6-2003 as amended and also Notification No. 24/2004-S.T., dated 10-9-2004 - Held that there is a specific exemption provided for recreational training institute and vocational training institute. In our view, the activities of the appellant would more appropriately be classified as recreational - Decided in favour of the assessee

Summary

Issues:
Waiver of pre-deposit and stay of recovery of Service Tax demand.

Waiver of Pre-deposit:
The case involved an application by M/s. Abacus Brain Study Private Ltd. seeking waiver of pre-deposit and stay of recovery of Service Tax demand of Rs.9,93,455/- along with applicable interest and penalties under Section 76 and 77 of Finance Act, 1994. The company was engaged in coaching children using ancient Japanese methods of mathematical calculation through the "Abacus" instrument. The coaching was provided to school teachers who, in turn, coached students on behalf of the company. The dispute was regarding the Service Tax demand on tuition fees collected from students trained by the instructors during the period from November 2007 to September 2008. The appellant's counsel argued that a previous decision in the case of Fast Arithmetic favored the assessee, leading to the waiver of pre-deposit and consideration of the appeal.

Decision on the Dispute:
The Tribunal reviewed the Fast Arithmetic case where it was established that the abacus training program by the appellant aimed to create interest in mathematics and enhance thinking capacity through recreational methods. The Tribunal found that the activities of the appellant aligned more with recreational training institutes rather than commercial coaching centers. Specific exemptions under Notification No. 9/2003-S.T. and Notification No. 24/2004-S.T. supported this classification. The Tribunal concluded that the appellant's activities could be considered as recreational training, making them eligible for exemption. As no material was presented to challenge the Tribunal's decision in the Fast Arithmetic case, the appeal by M/s. Abacus Brain Study Private Ltd. was allowed based on the previous favorable judgment.

Conclusion:
The Tribunal granted the waiver of pre-deposit and stay of recovery of Service Tax demand to M/s. Abacus Brain Study Private Ltd. based on the decision in the Fast Arithmetic case, which classified the company's activities as recreational training, thus exempting them from the Service Tax liability. The appeal was allowed, and the stay application was disposed of in favor of the appellant.