2013 (5) TMI 695 - AT - Service Tax

Computer training services - non discharge of service tax liability during the period July 2004 to March 2005 - appellant contended that during the said period computer training was covered under vocational training being exempted from service tax vide notification No. 9/2003-S.T. 12-06-2003 read with subsequent notification No. 24/2004-ST dated 10-09-2004 - Held that -The demand in the present case stand raised for the period July 2004 to March 2005 by way of issuance of show cause notice on 22-09-2010. During the relevant period all the decisions of the Tribunal were in favour of the assessee, laying down that a computer training institute is covered by the expression vocational training institute and as such, was exempted from service tax - no fault can be found on the part of the assessee to interpret the law in the same manner and not to pay service tax on the computer training services. It is only subsequently that the law declared by the Tribunal was reversed by in the case of Sunwin Techno Solutions Pvt. Ltd. 2010 (9) TMI 71 - SUPREME COURT OF INDIA as such there was a bonafide belief on the part of the assessee not to pay service tax on the computer training services provided by them. There is no evidence indicating any malafide suppression or mis-statement with an intent to evade duty on the part the appellant. Thus demand stands raised against the appellant by invoking the longer period of limitation, is not justifiable. In favour of assessee.

Summary

Issues:
- Whether the demand for service tax for the period July 2004 to March 2005 is justified?
- Whether the longer period of limitation can be invoked in this case?
- Whether the appellant had a bonafide belief not to pay service tax on computer training services?

Analysis:

Issue 1: Demand for Service Tax
The appellant was engaged in providing Commercial Coaching and Training services and was registered with the Service Tax Department. A show cause notice was issued proposing confirmation of service tax amounting to Rs. 2,02,939 for providing computer training during the period July 2004 to March 2005. The appellant argued that during that period, computer training was considered vocational training and exempt from service tax. They relied on various Tribunal decisions supporting their claim. The original authorities confirmed the demand, but the Tribunal found that during the relevant period, all Tribunal decisions favored the appellant, exempting computer training from service tax. The demand was set aside as the law was later clarified by the Supreme Court.

Issue 2: Longer Period of Limitation
The appellant contended that the demand should be set aside on the point of limitation. The appellant argued that since all Tribunal decisions favored them during the relevant period, there was no malafide intent to evade tax. The appellant's belief was based on the Tribunal's interpretation of the law. The Tribunal agreed that the demand for the period July 2004 to March 2005, raised in 2010, was not justifiable due to the appellant's bonafide belief and lack of evidence of malafide suppression.

Issue 3: Bonafide Belief of the Appellant
The Tribunal considered whether the appellant had a bonafide belief not to pay service tax on computer training services. It was found that all Tribunal decisions during the relevant period supported the appellant's position that computer training was exempt. The Tribunal noted that there was no evidence of malafide suppression or intent to evade duty on the part of the appellant. As a result, the Tribunal set aside the impugned order and allowed the appeal on the point of time bar, providing relief to the appellant.

This detailed analysis of the judgment highlights the key issues involved, the arguments presented by the parties, and the Tribunal's reasoning in arriving at the decision to set aside the demand for service tax based on the bonafide belief of the appellant and the lack of malafide intent.