2012 (5) TMI 490 - AT - Service Tax

Coaching or training to the employees of the buyer concerns - Held that - Respondent was not providing any coaching or training to outsiders except the employees of the buyer concerns who were to use the machines purchased. The training is not appearing to be a primary commercial activity of the appellant nor also commercial activity of such nature as known to the fiscal laws was carried out by Respondent. stay application and appeal of Revenue are dismissed.

Summary

Issues:
1. Taxability of training provided to the buyer of the machine under the category of commercial coaching.
2. Interpretation of commercial coaching and training for tax purposes.
3. Determination of whether the training provided constitutes a primary commercial activity.

Analysis:
1. The judgment revolves around the taxability of training provided to the buyer of the machine under the category of commercial coaching. The adjudication order proceeded to tax the training, prompting a review of whether the Revenue had a valid case to pursue. The Revenue argued that money received for providing training falls under taxable service of commercial coaching. However, upon examination, it was found that the training was not a primary commercial activity of the appellant, as it was solely provided to the employees of the buyer concerns for using the purchased machines.

2. The interpretation of commercial coaching and training was crucial in this case. The appellate authority, upon hearing the appeal of the assessee, concluded that the training provided did not constitute commercial coaching. The examination of what constituted commercial coaching and training led to the dismissal of the Revenue's appeal. It was observed that the training provided was not a commercial activity of the nature known to fiscal laws, as it was limited to the buyer's employees for machine operation purposes.

3. The court's analysis focused on whether the training provided by the respondent constituted a primary commercial activity. It was noted that the training was exclusively for the buyer's employees to use the purchased machines and was not a widespread commercial coaching service. As a result, the court determined that keeping the appeal pending would not serve any useful purpose, leading to the dismissal of both the stay application and the Revenue's appeal. The judgment highlights the importance of distinguishing between commercial coaching and specialized training activities for specific purposes.