2017 (3) TMI 119 - AT - Service Tax

Commercial Training or Coaching Services - appellant are specialized agency conducting French Language classes for a long time in India - whether service liable to tax? - Held that - whether all participants do get employment or become self employed is not the test to determine the vocational nature of the training. Learning with some proficiency, a language which is not commonly spoken in a country, certainly provides employment opportunities or chance for self employment, if the said language is imparted for such potential. Incidentally, the service tax demand sought to be confirmed on translation fee itself supports the case of the appellant that translation is one of the gainful employment that can be availed by the trainee of the institute - Accordingly, the exemption claimed by the appellant is available to them and the reasoning for rejecting the claim as recorded in the original order is not sustainable. Club or Association Services - Held that - the tax liability under the same has been set aside by the Hon ble High Court of Jharkhand in the case of Ranchi Club Ltd. 2012 (6) TMI 636 - Jharkhand High Court - demand set aside. Business Support Services - Held that - the appellants are not even aware of the purposes and are not only dealing with business entities, they were translating documents for various individuals also. No tenable reason found to categorize their activity of translation under business support service. It is not a service rendered by the appellant on outsourcing basis - the Service tax liability cannot be legally fastened on the appellant under this category. Renting of Immovable Property Services - Held that - assessee have discharged the service tax liability and written on the same to the lower authorities who did not take into account their submissions, as there is no contest of the service tax liability the payment is also claimed to have been made regularly, the jurisdictional authority can verify the same for reconciliation. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Service tax liability for Commercial Training or Coaching Services
2. Service tax liability for Club or Association Services
3. Service tax liability for Business Support Services
4. Service tax liability for Renting of Immovable Property Services

Analysis:

1. Commercial Training or Coaching Services:
The appellant, an Indo-French Cultural Centre, specializes in French language teaching and cultural events. The original authority imposed a service tax liability on the appellant, which was contested by the appellant's counsel. The counsel argued that learning French provides job opportunities and submitted evidence of students obtaining employment. The Tribunal noted that learning French can lead to employment in various sectors and considered it as vocational training. The Tribunal found the exemption claimed by the appellant valid, citing examples of employment opportunities related to French language learning. The decision was supported by the Tribunal's previous rulings.

2. Club or Association Services:
The appellant's liability under Club or Association Services was challenged, citing decisions of High Courts and previous Tribunal rulings that set aside similar tax liabilities. The Tribunal agreed with the appellant's counsel, holding that the impugned order was not sustainable in this regard.

3. Business Support Services:
The appellant's liability under Business Support Services for translation work was disputed. The counsel argued that the translation work does not fall under the definition of business support services as per the Finance Act. The Tribunal examined the nature of the translation services provided by the appellant and concluded that the service tax liability under this category was not justified. The Tribunal found that the translation services did not meet the criteria for business support services and set aside the tax liability.

4. Renting of Immovable Property Services:
The appellant did not contest the service tax liability for Renting of Immovable Property Services. The counsel asserted that the tax had been regularly discharged, but the lower authorities did not consider their submissions. The Tribunal acknowledged the appellant's compliance with the service tax liability under this category and directed the jurisdictional authority to verify the payments for reconciliation.

In conclusion, the Tribunal set aside the impugned order and allowed the appeal, finding that the tax liabilities under various categories were not legally sustainable. The judgment was pronounced on 18/01/2017.