2013 (11) TMI 254 - AT - Service Tax

Penalty u/s 78 - Commercial training or Coaching services - Held that - Imposition of penalty under the said Section envisages existence of malafide on the part of the assessee either by way of forgery, collusion, willful mis-statement or suppression of facts with intent to evade tax. No such element is present in the impugned case and this Tribunal also in a number of decisions has held that incase of training and coaching rendered by non-commercial organization service tax liability would not be attracted. In view of this position, the law was amended retrospectively to validate the levy of service tax on coaching and training services rendered by even non-commercial organizations - Imposition of penalty under Section 78 of the Finance Act, is not warranted in the facts and circumstances of the case. - no penalty - refund to be granted for the amount already deposited - Decided in favour of assessee.

Issues:
Service tax demand confirmation against M/s. Bombay Stock Exchange Ltd. for Commercial Training or Coaching services for the period July 2003 to March 2004.

Analysis:
The appeal was directed against the Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Mumbai, confirming a service tax demand of Rs. 10,26,731 against M/s. Bombay Stock Exchange Ltd. for the period in question. The appellant had already discharged their tax liability along with interest and penalties, except for the penalty imposed under Section 78 of the Finance Act, 1994. The appellant argued that during the period, there was uncertainty regarding the liability to pay service tax on such services rendered by non-commercial organizations. The appellant requested a waiver of the penalty under Section 78, citing the subsequent amendment in the law to cover all institutions providing training or coaching for consideration, irrespective of their nature. The appellant claimed that no malafide intent could be attributed to them for the delay in discharging the tax liability.

The Ld. Additional Commissioner (AR) representing the Revenue agreed with the appellant's submissions. The Tribunal considered the arguments presented by both parties and noted that the dispute centered on the penalty imposed under Section 78 of the Finance Act, 1994. The Tribunal highlighted that the imposition of penalty under this section required the presence of malafide intent on the part of the assessee, such as forgery, collusion, willful mis-statement, or suppression of facts to evade tax. However, in the present case, no such element was found. The Tribunal referred to previous decisions where it was held that service tax liability would not apply to training and coaching services provided by non-commercial organizations. The law was subsequently amended retrospectively to validate the levy of service tax on such services, even when rendered by non-commercial organizations.

Considering the circumstances and legal position, the Tribunal concluded that the imposition of penalty under Section 78 of the Finance Act was not justified. Therefore, the penalty imposed on the appellant under Section 78 was set aside, and the Revenue was directed to refund the amount of penalty already paid by the appellant promptly.

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