2014 (2) TMI 863 - AT - Service Tax

Waiver of pre-deposit - Levy of service tax on Management Education Course - scope of commercial coaching and training service - vocational service - Held that - the services, namely, imparting of management courses to the students rendered by the Applicant for the period from 2004-05 to 2008-09, are covered by the definition of Commercial Training or Coaching Services . Prima-facie, we also find that the said Institute run by the Applicant, cannot be considered as a Vocational Training Institute as the Certificates/Diplomas imparted by the Applicant - Institute do not enable the students to seek employment or to undertake self-employment after such training and coaching ; also few courses viz. corporate training are admittedly registered under the category of Commercial Coaching and Training . - stay granted partly.

Summary

Issues:
- Waiver of predeposit of service tax and penalty imposed under Sections 78 and 76 of the Finance Act, 1994.
- Classification of services provided by the Applicant as 'Commercial Training or Coaching Services'.
- Exemption under Notification No. 24/2004-ST dated 10th September, 2004 for Vocational Training Institutes.
- Dispute on computation of demand based on financial transactions and un-declared realized amounts.
- Opportunity to explain alleged un-declared realized amounts.
- Errors in computation of demand highlighted by the Applicant.
- Reasonableness of the offer made by the Applicant for deposit.

Analysis:
The case involved an application for waiver of predeposit of service tax and penalties amounting to Rs.4.03 Crores imposed under Sections 78 and 76 of the Finance Act, 1994. The Applicant provided education on Management Courses and Corporate Training. The dispute arose from the classification of services provided by the Applicant as 'Commercial Training or Coaching Services' under the Finance Act. The Applicant argued that their services did not fall under this category as they were imparting education in management studies, not commercial training. Additionally, they claimed exemption under Notification No. 24/2004-ST for being a Vocational Training Institute. The Department contended that the services provided by the Applicant did indeed fall under 'Commercial Coaching & Training Services'. The Tribunal found that the services provided by the Applicant were covered by the definition of 'Commercial Training or Coaching Services' but noted errors in the computation of the demand amounting to Rs.1.71 Crores and around 1.00 Crore. The Tribunal directed the Applicant to deposit 25% of Rs.1.20 Crores within eight weeks, with the balance amount waived and recovery stayed during the appeal process.

The Tribunal observed that the Institute run by the Applicant did not meet the criteria to be considered a Vocational Training Institute as per the relevant notification. The dispute also revolved around the computation of demand, with discrepancies highlighted by the Applicant. The Department acknowledged that the Applicant had presented documents pointing out errors in the computation, but these were not submitted during the earlier stages of the proceedings. The Tribunal found the offer made by the Applicant for deposit reasonable and directed them to comply within a specified timeframe. The decision was based on a prima facie assessment of the issues raised by both parties, taking into account the submissions and documents provided during the proceedings. The Tribunal's order aimed to balance the interests of both parties while ensuring compliance with the legal provisions regarding service tax liabilities and penalties.