2013 (12) TMI 52 - AT - Service Tax

Commercial Training or Coaching Service - Computer training or vocational training - Benefit of exemption under Notification No. 9/2003-S.T., dated 20-6-2003 - Held that - appellant, who was admittedly providing 2D and 3D animation courses to the aspirants through computer medium, cannot be said to have provided computer training and can be said to have provided vocational training. Prima facie, computer hardware and software constituted a medium for the appellant to provide vocational training to those who required training in 2D and 3D animation. In this view of the matter, the appellant has prima facie case against the major part of the impugned demand - Stay granted.

Summary

Issues:
1. Demand under "Commercial Training or Coaching Service" for the period April 2005 to December 2008.
2. Minor demand under "Video Tape Production Service" for the period 2006-07.
3. Eligibility for exemption under Notification No. 9/2003-S.T., dated 20-6-2003 as amended.

Analysis:

1. The main demand against the appellant pertains to the provision of "Commercial Training or Coaching Service" from April 2005 to December 2008, amounting to Rs. 50.77 lakhs, partially within limitation. Additionally, there is a minor demand of Rs. 2,36,484/- under "Video Tape Production Service" for the period 2006-07. The primary challenge to the main demand is based on the appellant's claim for exemption under Notification No. 9/2003-S.T., which granted exemption for "Commercial Training or Coaching" provided by vocational training institutes. The appellant's eligibility for this exemption was denied by the adjudicating authority on the grounds that the appellant functioned as a computer training institute, thereby not qualifying for the exemption post an amendment in Notification No. 24/2004-S.T.

2. Upon reviewing the notifications and arguments from both parties, the Tribunal is of the prima facie view that the appellant, offering 2D and 3D animation courses through computer medium, was engaged in providing vocational training rather than computer training. The Tribunal opined that the use of computer hardware and software by the appellant facilitated vocational training in animation, indicating a prima facie case against the major part of the disputed demand. Consequently, the Tribunal granted waiver and stay as requested by the appellant.

3. The crux of the judgment revolves around the interpretation of the notifications regarding the scope of exemption for "Commercial Training or Coaching Service" and the distinction between computer training and vocational training. The Tribunal's analysis focused on the nature of the services provided by the appellant, emphasizing the use of computer technology as a medium for vocational training in animation. By differentiating between computer-based vocational training and generic computer training, the Tribunal leaned towards granting the appellant the benefit of exemption under the relevant notification. This decision underscores the importance of the specific activities and services offered by an institute in determining its eligibility for tax exemptions in the realm of commercial training services.