2014 (7) TMI 242 - AT - Service Tax

Commercial training and coaching services - providing computer training which is recognized by Maharashtra State Board of Vocational Examination - whether the appellants are providing commercial training or coaching services - Held that - Appellants are providing training but are not issuing any certificate. The certificate is issued by Maharashtra State Board of Vocational Examination. As per the definition, the only exclusion is in respect of institute or establishment which issues any certificate or diploma or degree or any educational qualification recognized by law. - ratio of the decision of the Hon ble Delhi High Court in the case of Indian Institute of Aircraft Engineering 2013 (5) TMI 592 - DELHI HIGH COURT is not applicable in the facts of the present case. - Decided against the assessee. Regarding penalty - appellants were under the bonafide belief that the institution is recognized by Maharashtra State Board of Vocational Examination - penalty waived - Decided in favor of assessee.

Summary

Issues involved:
- Appeal against confirmed demand and penalties
- Appeal against rejection of refund claim
- Interpretation of the definition of "Commercial training or coaching centre"
- Applicability of the decision in the case of Indian Institute of Aircraft Engineering
- Imposition of penalties under Sec. 76 & 78 of the Finance Act
- Reasonable cause for failure under Sec. 80

Analysis:
1. Appeal against confirmed demand and penalties:
The appellant filed an appeal against the confirmed demand and penalties imposed for providing commercial training and coaching services. The Revenue contended that the appellants were liable for service tax as they were not issuing any recognized certificate. The appellants argued that they were providing training recognized by the Maharashtra State Board of Vocational Examination, thus exempt from taxable services. The Tribunal found that the appellants were not issuing certificates, unlike the case cited by the appellants. Therefore, the Tribunal upheld the demand for service tax.

2. Interpretation of the definition of "Commercial training or coaching centre":
The issue revolved around whether the appellants fell under the definition of "Commercial training or coaching centre." The Tribunal noted that the exclusion under the definition applied to institutes issuing recognized certificates, which the appellants were not doing. Therefore, the Tribunal concluded that the appellants were providing taxable services as they did not issue any certificates.

3. Applicability of the decision in the case of Indian Institute of Aircraft Engineering:
The appellants heavily relied on a decision by the Delhi High Court in a similar case. However, the Tribunal distinguished the facts, noting that the Delhi High Court's decision was based on the institute issuing approved certificates, unlike the present case. Consequently, the Tribunal found that the Delhi High Court's decision was not applicable to the current scenario.

4. Imposition of penalties under Sec. 76 & 78 of the Finance Act:
The adjudicating authority had imposed penalties under Sec. 76 & 78 of the Finance Act. However, the Tribunal invoked Sec. 80, which exempts penalties if the assessee proves a reasonable cause for the failure. Since the appellants believed in good faith that their institution was recognized, the penalties under Sec. 76 & 78 were set aside.

5. Appeal against rejection of refund claim:
The appeal against the rejection of the refund claim was dismissed as the Tribunal held that the appellants were indeed providing taxable services. Therefore, the contention of the appellants for a refund was found to have no merit.

6. Conclusion:
The Tribunal upheld the demand for service tax against the appellants for providing commercial training and coaching services. The penalties under Sec. 76 & 78 were set aside due to a reasonable cause for the failure. The appeal against the rejection of the refund claim was dismissed. The cross objection was also disposed of accordingly.