2013 (12) TMI 1377 - AT - Service Tax

Waiver of pre deposit - Demand of service tax - Commercial training or coaching services - Held that - commercial and coaching center excludes the institute or establishments from the levy of service tax which were engaged in providing pre-school coaching and training or the center or any institute or establishment which issues any certificate or diploma or degree or any educational qualification recognised by law for the time being in force. The applicants are not issuing any certificate/diploma/ degree. They are only providing the coaching and training in the area of aircraft maintenance and training is only for the practical experience. Prima facie we are of the view that the applicant does not fall under the exclusion category of the services - Conditional stay granted.

Summary

Issues:
Stay application for waiver of pre-deposit and recovery of dues adjudged against M/s Rajiv Gandhi Memorial College of Aeronautic, Jaipur.

Analysis:

Issue 1: Taxability of services provided by the applicant
The case involves M/s Rajiv Gandhi Memorial College of Aeronautic, Jaipur, engaged in providing commercial training or coaching services related to Aircraft Maintenance Engineering. The department initiated proceedings against them, demanding service tax, interest, and penalties, which were confirmed by the Commissioner (Appeals). The applicant argued that their services should not be considered taxable as they provide training for obtaining a basic license in aircraft maintenance engineering, not commercial coaching and training services. The Tribunal examined the definition of commercial and coaching centers under Section 65(27) of the Finance Act, which excludes institutes providing pre-school coaching or issuing educational qualifications. Since the applicant did not issue certificates or diplomas, the Tribunal held that they do not fall under the exclusion category. Consequently, the Tribunal directed the applicant to make a pre-deposit of Rs. 6.00 lakhs within six weeks, with a stay of recovery against the remaining amount pending appeal disposal.

Issue 2: Time-barred demand and imposition of penalties
The applicant contended that the demand for the period October 2004 to February 2010 was partly time-barred due to no suppression of facts, and therefore, no penalty should be imposed. However, the Revenue argued that the service provided by the applicant falls under taxable services as per Section 65(26) of the Finance Act. The Tribunal noted that the original authority dropped the proceedings against the applicant, but the Commissioner (Appeals) allowed the Revenue's appeal. While acknowledging the absence of suppression of facts, the Tribunal did not find sufficient grounds for a complete waiver of pre-deposit. Therefore, the Tribunal upheld the demand for pre-deposit and granted a stay of recovery against the remaining tax, interest, and penalties until the appeal's final disposal.

In conclusion, the Tribunal's judgment in the stay application filed by M/s Rajiv Gandhi Memorial College of Aeronautic, Jaipur, focused on the taxability of the services provided by the applicant and the imposition of pre-deposit and recovery of dues. The decision highlighted the interpretation of relevant provisions of the Finance Act and concluded that the applicant did not qualify for a complete waiver of pre-deposit, directing them to make a specified payment while granting a stay on the remaining amount pending appeal resolution.