2017 (11) TMI 349 - AT - Service Tax

Commercial training and coaching centre services - Extended period of limitation - effect of amendment, retrospective or prospective - N/N. 9/2003-ST dated 20.06.2003 as amended by N/N. 24/2003-ST dated 10.09.2004 - Held that - the explanation as to what is vocational training institute indicates that the said exemption can be extended to any vocational training institute which imparts skills to enable the trainee to seek employment or undertake self-employment directly after such training or coaching. It is nobodys case in all these appeals that for completion of the educational programmes conducted by the appellants, students are employed either directly by the employers or can seek self-employment. We find that in support of such a claim, appellants have enclosed a list of the students who were employed by various industries on successful completion of education programmes conducted by the appellants. In our view, there can not be any doubt as to the fact that the students successfully completing the educational programmes of the appellants are being selected for employment by various organisations. It is evident that the term vocational training institute included the commercial training or coaching centers which provide vocational coaching or training meant to impart skills to enable the trainees to seek employment or to have self employment directly after such training or coaching. The notion of such training institute having been recognized or accredited to nowhere emerges from such a broad definition. The further Notification of 2010 substitutes the existing explanation to the term vocational training institute and narrowing it to those institutes affiliated to National Council for Vocational Training offering courses in designated trade in fact supports the assessee. Had the intention been to exempt only such class or category of institutions, the appropriate authority would have designed such a condition in the original Notification of 2003 and Notification No. 10 of 2004. Service tax demands raised and confirmed in the denovo adjudication by denying the benefit of exemption notification for the period 1.07.2003 to 31.3.2005 is incorrect and unsustainable - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Taxability of services rendered by the appellants under Section 65(105)(zzc) of the Finance Act.
2. Eligibility for exemption under Notification No. 9/2003-ST and Notification No. 24/2004-ST.
3. Validity of conflicting decisions by the Tribunal on the same set of facts.

Issue-Wise Detailed Analysis:

1. Taxability of Services Rendered by the Appellants:
The appellants, recognized as deemed private universities by the University Grants Commission, were issued show-cause notices demanding service tax under the category of commercial training and coaching center services. The adjudicating authority confirmed the demand of service tax, interest, and penalties. The Tribunal initially ruled in favor of the appellants, but following a retrospective amendment by the Finance Act 2010, the Apex Court remanded the matter to the Tribunal. The Tribunal upheld the taxability of the services rendered by the appellants under Section 65(105)(zzc) but remanded the matter back to examine the eligibility for exemption under Notification No. 9/2003-ST.

2. Eligibility for Exemption under Notification No. 9/2003-ST and Notification No. 24/2004-ST:
The adjudicating authority denied the benefit of the exemption notifications on the grounds that the appellants were not vocational training institutes. The term "vocational training institute" was interpreted to exclude educational programs in management, finance, banking, insurance, accounts, and law. However, the Tribunal noted that the explanation to the notifications indicated that vocational training institutes are those that impart skills enabling trainees to seek employment or undertake self-employment directly after training. The Tribunal found that students completing the appellants' programs were employed by various industries, thus meeting the criteria for vocational training. Citing precedents, the Tribunal concluded that the appellants were eligible for the exemption.

3. Validity of Conflicting Decisions by the Tribunal:
The appellants argued that the Tribunal's second order, which differed from the first on the same set of facts, was improper. They cited the Hon'ble High Court of Allahabad's decision in Xerox India Ltd., which held that conflicting decisions by a coordinate bench of the CESTAT on the same facts were not proper. The Tribunal, however, noted that the second order was before the Apex Court and, without a stay, it was not appropriate to record findings on this submission. The Tribunal rejected the appellants' request to set aside the second order, indicating that it was a matter for the Apex Court to decide.

Conclusion:
The Tribunal concluded that the appellants were eligible for the benefit of Notification No. 9/2003-ST and Notification No. 24/2004-ST, as their programs enabled students to seek employment or self-employment. The service tax demands for the period from 1.07.2003 to 31.3.2005 were deemed incorrect and unsustainable. Consequently, the impugned orders were set aside, and the appeals were allowed.