2008 (11) TMI 95 - AT - Service Tax

Services of Computer Training (Software and Hardware) - period involved is from 01.07.2004 to 30.09.2004 - held that this amending Notification No 19/2005-ST. dated 07.06.2005 cannot have retrospective effect - held that the Vocational Training Institute itself would cover even the Computer Training following the ratio of the Doon Institute of Information Technology decision, held that the appellants are not liable to pay Service Tax during the relevant period appeal of assessee is allowed

Summary

Issues:
Appeal against Order-in-Appeal No. 004/2006-CE dated 27.01.2006 regarding Service Tax liability for Computer Training services from 01.07.2004 to 30.09.2004; Claim for refund based on exemption during the relevant period; Interpretation of exemption Notifications; Applicability of Notification No. 24/2004-ST dated 10.09.2004 and subsequent amendment through Notification No. 19/2005-ST dated 07.06.2005; Retrospective effect of the amendment.

Analysis:
The appeal was filed against the Order-in-Appeal No. 004/2006-CE dated 27.01.2006 passed by the Commissioner of Central Excise (Appeals II), Bangalore, regarding the Service Tax liability for Computer Training services provided from 01.07.2004 to 30.09.2004. The appellants initially paid Rs. 5,70,753/- as Service Tax along with interest of Rs. 7,319/- under 'Commercial Training or Coaching Services' and later sought a refund, claiming exemption during the relevant period. The Original Authority and the Commissioner (Appeals) rejected the refund claim, stating that the appellants were not covered under the term "Vocational Training Institute."

During the hearing, the learned Advocate for the appellants referred to decisions of the Tribunal emphasizing that 'Computer Training' falls under 'Vocational Training.' The Advocate highlighted specific Notifications, arguing that Computer Training was exempted from Service Tax until 30.06.2004. The Departmental Representative contended that Computer Training was not included in Vocational Training and should not receive unintended exemption benefits. The Tribunal carefully examined the exemption Notifications, noting that Computer Training was exempted from 01.07.2003 to 30.06.2004 but was excluded from the exemption under Notification No. 24/2004-ST dated 10.09.2004.

Subsequently, an amendment through Notification No. 19/2005-ST dated 07.06.2005 excluded Computer Training Institutes from the exemption, effective from 16.06.2005. The appellants argued that this amendment could not have retrospective effect and relied on previous Tribunal decisions supporting their interpretation. The Tribunal, following the precedent set by the Doon Institute of Information Technology case, held that the appellants were not liable to pay Service Tax during the relevant period as Computer Training fell under the exemption until 16.06.2005. The appeal was allowed, granting consequential relief to the appellants.

In conclusion, the Tribunal's decision was based on a thorough analysis of the exemption Notifications and the applicability of amendments, ensuring that the appellants were not unfairly subjected to Service Tax during the period in question.