2017 (7) TMI 784 - AT - Service Tax

Commercial coaching and training services - Amount charged for training under Abacus - taxability - SSI exemption - Penalty - Held that - the taxability of the amount charged for training under Abacus is still before the Hon ble Supreme Court for the final decision and subsequently various Benches of Tribunal have come to a conclusion that an amount collected Abacus training is not taxable with effect from 2012. As regards the issue for demand of service tax liability on training of English Language finding the said taxability was contested before various matters before the Tribunal, the Bench finally decided the English Language training is covered under the Head of Commercial Coaching in Training Class Services. Since this issue settled by the Tribunal we are of the view these would a bonafide belief in the mind of appellant as to non-taxability of the amount received by them. In view of this, we hold that provisions of Section 80 can be invoked in the case in hand penalties liable to be imposed on the appellant in respect of the Abacus and English Language training can be set aside. Appeal allowed - decided in favor of appellant.

Issues:
1. Service tax liability on amounts collected for various courses.
2. Small scale exemption eligibility for certain courses.
3. Penalties imposed on the appellant.
4. Taxability of training under Abacus and English Language.
5. Invocation of Section 80 for penalties.

Service Tax Liability on Various Courses:
The appeal was against an order setting aside the demand for service tax on amounts collected for Abacus training but confirming demands for VETA [English Language] courses. The First Appellate Authority remanded the issue of small scale exemption for Handwriting & Vedic Maths courses. The appellant argued for small scale exemption due to reduced turnover. The Tribunal remanded the matter to the adjudicating authority to reconsider the issues of service tax liability and small scale exemption.

Small Scale Exemption Eligibility:
The appellant, an Institute of Computer Education, sought small scale exemption for certain courses. The Tribunal found that the benefit of the exemption needed to be considered based on turnover and specific notifications. The matter was remanded to the adjudicating authority for a fresh examination following the principles of natural justice.

Penalties Imposed on the Appellant:
The appellant did not contest the demand for VETA [English Language] courses and sought to adjust the demands against pre-deposits. The appellant withdrew the appeal, and the penalties were contested by the Departmental Representative. The Tribunal considered the taxability of training under Abacus and English Language, invoking Section 80 to set aside penalties due to a genuine belief in non-taxability.

Taxability of Training under Abacus and English Language:
The Tribunal noted that the taxability of Abacus training was pending before the Supreme Court, with Tribunal Benches concluding it was not taxable from 2012. English Language training was deemed taxable under "Commercial Coaching in Training Class Services" by the Tribunal. Considering the settled positions, the Tribunal held that penalties could be set aside under Section 80 due to a genuine belief in non-taxability.

Invocation of Section 80 for Penalties:
Section 80 was invoked to set aside penalties on the appellant for Abacus and English Language training due to a genuine belief in non-taxability. The adjudicating authority was directed to consider the Tribunal's directions during the fresh adjudication process.

In conclusion, the appeal was disposed of with directions for the adjudicating authority to reconsider the service tax liability, small scale exemption eligibility, and penalties in accordance with the Tribunal's findings and principles of natural justice.

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