2017 (9) TMI 1121 - AT - Service Tax

Waiver of pre-deposit - Commercial training and Coaching services - Held that - for the earlier period for the said activity, this Tribunal in the case of Mem Worldwide Private Limited Versus Commr. of C. Ex. & S.T., Rohtak 2014 (8) TMI 1097 - CESTAT NEW DELHI , prima facie has taken view that the service tax is not payable by the applicant under the said category - As this Tribunal has taken a view that the demand is not sustainable against the applicant, therefore, the requirement of pre-deposit of demand of service tax, interest and penalty and stay recovery during the pendency of the appeal waived - appeal allowed.

Summary

Issues:
Demand of service tax on commercial training and coaching services, waiver of pre-deposit during appeal, interpretation of relevant legal provisions and notifications.

Analysis:

1. Demand of Service Tax on Commercial Training and Coaching Services:
The judgment addresses the confirmation of a service tax demand of ?13,55,852 against the applicant for commercial training and coaching services. The Tribunal considered the definition of "commercial training or coaching center" under Section 65(27) of the Finance Act, 1994. It was noted that during the period in question, the exclusion clause in the definition had been deleted by the Finance Act, 2011. The Tribunal observed that since the training programs conducted by the appellant were recognized by IGNOU for certification, they would not fall under the definition of a commercial training or coaching center. Consequently, the service provided by the appellant would not attract service tax under Section 65(105)(zzc).

2. Waiver of Pre-Deposit During Appeal:
The applicant had filed for a waiver of pre-deposit of the dues pending the appeal. The Tribunal considered the earlier Stay Order dated 22.08.2014, where it was prima facie observed that the service tax might not be payable by the applicant for the said activity. Based on this view, the Tribunal granted the waiver of pre-deposit of the demand of service tax, interest, and penalties during the pendency of the appeal, as it had previously taken a stance that the demand was not sustainable against the applicant.

3. Interpretation of Legal Provisions and Notifications:
The Tribunal further analyzed Notification No. 24/2004-S.T., dated 10-9-2004, which exempted taxable services related to commercial training or coaching by a "vocational training institute." The notification defined a vocational training institute as a center providing vocational training or coaching that enables trainees to seek employment or undertake self-employment directly after the training. The Tribunal found that the training programs organized by the appellant for construction workers aimed at developing their skills to improve market value, enabling them to seek employment or self-employment directly. Consequently, the Tribunal viewed the appellant as a vocational training institute covered by the exemption notification, leading to the conclusion that the service tax demand of ?1,17,02,437 was not sustainable.

In conclusion, the judgment delves into the nuances of the definition of commercial training or coaching centers, the applicability of exemption notifications, and the grant of waiver of pre-deposit during the appeal process based on the Tribunal's prima facie views on the sustainability of the service tax demands.