2018 (1) TMI 167 - AT - Service Tax

Commercial Training and Coaching Services - education services by imparting various diploma courses in management and engineering through correspondence / distance education mode - Held that - The Tribunal in the case of Commissioner of Service Tax, (Delhi) Versus Ashu Exports Pvt. Ltd. 2014 (3) TMI 863 - DELHI HIGH COURT referring to the definition of vocational training institute observed that such institutes would fall within the ambit of the exemption notification - appeal dismissed - decided against Revenue.

Summary

Issues:
Interpretation of commercial training or coaching services for service tax levy under the Finance Act, 1994; Applicability of Notification No. 24/2004-ST exempting vocational training institutes from service tax.

Analysis:
The case involved the rendering of education services through correspondence/distance education mode, with the department contending that these services fell under Commercial Training and Coaching Services, necessitating service tax payment. The original authority upheld the demand for service tax, interest, and penalties. However, the Commissioner (Appeals) set aside the demand, deeming the services exempt as vocational training courses, leading to the department's appeal before the Tribunal.

The department argued that the courses offered were unrecognized and did not align with AICTE guidelines, emphasizing that the services provided should be by a commercial organization to attract service tax. The respondents' counsel, on the other hand, supported the Commissioner's decision, citing Notification No. 24/2004-ST exempting vocational training institutes from service tax and referencing relevant case law.

The Tribunal analyzed the definitions of commercial training or coaching under section 65(26) and 65(27) of the Finance Act, 1994, along with Notification No. 24/2004-ST exempting vocational training institutes from service tax. It noted that the courses provided by the respondents, although not approved by AICTE or affiliated with any recognized body, aligned with the definition of vocational training institute under the notification. The Tribunal referenced a similar case upheld by the Delhi High Court, emphasizing the broad nature of imparting skills for employment or self-employment directly after training.

The Tribunal concluded that the impugned order correctly applied the exemption under Notification No. 24/2004-ST, dismissing the Revenue's appeal. The decision was based on the broad definition of vocational training institute and the absence of accreditation requirements within the notification, aligning with previous rulings and case law interpretations.

In essence, the Tribunal upheld the Commissioner's decision, emphasizing the exemption for vocational training institutes under Notification No. 24/2004-ST and the broad scope of imparting skills for employment or self-employment directly after training, as outlined in relevant legal provisions and case law.