2012 (6) TMI 456 - AT - Service Tax

Waiver of pre-deposit - Commercial Training and Coaching Service - appellant was engaged in the activity of providing training courses on English, German, French, etc. - they were under the impression that their activity fell in the category of Vocational Training Course and hence exempted from payment of Service Tax Held that - Board s Circular No.59/8/2003-ST dated 20.6.2003 wherein it was clarified that vocational coaching and training services provided by foreign language institutes would not be chargeable to Service Tax on account of exemption under Notification No.9/2003-ST. They cannot be held to have suppressed any fact with intent to evade payment of Service Tax. - Extended period of limitation, prima facie, is not invocable. Waiver of pre-deposit granted.

Summary

Issues:
1. Waiver of pre-deposit and stay of recovery sought by the appellant for Service Tax demand and penalties imposed.
2. Applicability of exemption under Notification No.9/2003-ST for vocational training services.
3. Claim of exemption for teaching English as a foreign language.
4. Argument on limitation for recovery of Service Tax.

Analysis:
The appellant filed an application seeking waiver of pre-deposit and stay of recovery for a Service Tax demand of Rs.34,57,966/- under the head 'Commissioner Training and Coaching Service' for the period from July 2003 to March 2007. The appellant provided training courses in languages like English, German, French, etc., but did not pay Service Tax on the fees collected, believing they were exempt under vocational training categories. The department issued a show-cause notice invoking an extended period of limitation for recovery of Service Tax and penalties. The appellant contended that they were entitled to exemption under Notification No.9/2003-ST for vocational training services. They argued that English should be considered a foreign language, citing Circulars and Notifications supporting exemption for teaching foreign languages. The appellant also claimed the demand was time-barred, as the relevant facts were known to the department during the material period.

The appellant's counsel argued that the appellant had a prima facie case on both merits and limitation. They emphasized that English should be treated as a foreign language for exemption purposes, citing legal provisions and precedents. The appellant's registration under a different service category and the belief in exemption were highlighted to support the limitation argument. The department opposed the application based on previous authorities' findings.

The Tribunal considered the arguments and found merit in granting waiver of pre-deposit and stay of recovery. It noted the precedent set in a similar case where English was considered a foreign language for exemption purposes. The Tribunal agreed with the appellant's contention that they had a plausible case on limitation, as they were registered under a different service category and had a genuine belief in exemption. The Tribunal concluded that the extended period of limitation was not applicable in this case, leading to the allowance of the application for waiver and stay of recovery for all amounts adjudged against the appellant.