2013 (1) TMI 163 - AT - Service Tax

Commercial Coaching or Training Services - period 01-04-2005 to 31-03-2010 - Held that - As decided in Administrative Staff College of India Versus Commissioner of Customs & Central Excise, Hyderabad 2008 (8) TMI 194 - CESTAT, BANGALORE the very fact the word commercial has been used indicates that the word commercial Qualifies the Commercial coaching or training centre. It doesn t qualify coaching or training. It qualifies the centre. As long as the institution is registered under the Societies Registration Act and also exempted from income-tax, it cannot be considered as a commercial centre. Therefore, no service tax is leviable under the category of Commercial Coaching or Training & in Ahmedabad Management Association Versus Commissioner of Service Tax, Ahmedabad 2008 (11) TMI 126 - CESTAT, AHMEDABAD that service tax on various seminars and meetings under convention service not justified as tax is leviable only if it is rendered by a commercial concern prior to 1-5-2006. The decision in the case of Administrative Staff College (supra) has been upheld by the Apex Court as reported at Commissioner v. Administrative Staff College of India 2010 (3) TMI 906 - SUPREME COURT OF INDIA & Ahmedabad Management Association has been set aside by the Apex Court and remanded for denovo consideration in the light of the retrospective amendment made by Finance Act, 2010 as reported at Commissioner v. Ahmedabad Management Association (2010 (10) TMI 908 - SUPREME COURT OF INDIA). Having considered all the aspects above prima facie view that the word commercial in definitions at section 65 (26) and 65 (27) and 65 (105) (zzzc) cannot be considered to be superfluous and the explanation added by Finance Act, 2010 may not be a sufficient reason to take a view that the impugned training to be a commercial training . As substantial part of the demand is confirmed invoking extended period of five years and such extended period may not be available while demanding short paid taxes on account of such interpretational issues - waiver of requirement of pre-deposit of dues for admission of the appeal and there shall be stay on collection of dues arising from the impugned order during the pendency of the appeal -in favour of assessee.

Summary

Issues Involved:
1. Taxability of training services under "Commercial Coaching or Training."
2. Applicability of retrospective amendments to the Finance Act, 2010.
3. Interpretation of the term "commercial" in the context of service tax.
4. Invocation of the extended period for demand of service tax.

Detailed Analysis:

1. Taxability of Training Services under "Commercial Coaching or Training":
The appellant, a co-operative society promoted by six different banks, provides training to bank employees. The Revenue contended that these training services fall under the category of "Commercial Coaching or Training" as defined in sections 65(26), 65(27), and made taxable under section 65(105)(zzc). The appellant argued that the training provided is not commercial, as it is intended for professional knowledge impartation to employees, and the participants do not pay for the training; the banks do. The appellant relied on various Tribunal decisions where similar training was not considered "Commercial Coaching or Training."

2. Applicability of Retrospective Amendments to the Finance Act, 2010:
The Revenue pointed out that the Finance Act, 2010, introduced an explanation with retrospective effect from 01-07-2003, stating that "commercial training or coaching centre" includes any center imparting training for consideration, regardless of profit motive or organizational structure. This amendment aimed to clarify that all training provided for consideration should be taxed unless specifically exempted.

3. Interpretation of the Term "Commercial" in the Context of Service Tax:
The Tribunal examined the term "commercial" in sections 65(26), 65(27), and 65(105)(zzc). The explanation added by the Finance Act, 2010, suggests that the nature of the institution (profit or non-profit) is irrelevant; however, it does not clarify the purpose, organization, or eligibility criteria for the training. The Tribunal noted that the word "commercial" should not be rendered superfluous and must qualify the nature of the training or coaching provided.

4. Invocation of the Extended Period for Demand of Service Tax:
The appellant argued that the Show Cause Notice issued on 21-10-2010 for the period 01-04-2005 to 31-03-2010 was time-barred. The Tribunal observed that the extended period might not be applicable in cases involving interpretational issues, such as the definition of "commercial" training.

Conclusion:
The Tribunal considered both sides' arguments and noted that the retrospective amendment by the Finance Act, 2010, does not eliminate the relevance of the term "commercial." The Tribunal referenced previous decisions where professional training was not classified as "Commercial Coaching or Training." The Tribunal granted a stay on the collection of dues during the pendency of the appeal and waived the requirement for pre-deposit of dues. The appeal filed by Revenue was linked with the appellant's appeal for final hearing.