2018 (2) TMI 1261 - AT - Service Tax

Whether the foreign language training institute imparting training and coaching in English Spanish French and German are eligible for exemption under Notification No. 9/2003-ST dated 20.06.2003 and Notification No. 24/2004-ST dated 10.09.2004 or are taxable under the category of commercial training and coaching service or not? Held that - Tribunal in the case of M/s. British School of Language New Delhi vs. CST Delhi 2017 (4) TMI 97 - CESTAT NEW DELHI wherein this Tribunal relying on the decision of M/s. Alliance Francaise De Delhi vs. CST Delhi 2017 (3) TMI 119 - CESTAT New Delhi held that imparting training in foreign language will make the institute vocational training institute. Therefore they are entitled for exemption under Notification No. 24/2004 ST dated 10.9.2004. Time limitation - Held that - initially the appellant has registered and paid the service tax. But the Joint Commissioner vide order dated 5.10.2005 has observed that the activity undertaken by the appellant is not taxable - extended period of limitation is not invokable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against service tax demand for commercial coaching and training service. Eligibility for exemption under Notification No. 9/2003-ST and Notification No. 24/2004-ST for foreign language training institute.

Analysis:
The appellant appealed against the order demanding service tax for providing commercial coaching and training services. The main issue was whether a foreign language training institute offering training in English, Spanish, French, and German was eligible for exemption under Notification No. 9/2003-ST and Notification No. 24/2004-ST or if they were taxable under commercial training and coaching services. The Tribunal referred to a previous case involving the British School of Language and the decision in the case of M/s. Alliance Francaise De Delhi to determine that imparting training in foreign languages could be considered vocational training. The Tribunal noted that learning a foreign language like French could provide job opportunities in various sectors and held that the appellant was entitled to exemption under Notification No. 24/2004-ST.

The Tribunal disagreed with the simplistic reasoning used by the original authority to uphold tax liability for commercial training or coaching services. They emphasized that learning French could lead to employment opportunities in various fields and that the training provided by the appellant could be categorized as vocational training. The Tribunal considered the objectives of learning French, including gaining employment in French-speaking countries or industries, and found that the exemption claimed by the appellant was valid. They also highlighted that the service tax demand for translation fees supported the argument that the training provided by the appellant led to gainful employment opportunities for the trainees. The Tribunal referenced a previous decision in Darshan English Classes to support their conclusion.

Since the issue had already been settled in previous cases, the Tribunal held that the appellant was not liable to pay service tax and allowed the appeal with consequential relief. Additionally, the Tribunal noted that the appellant had initially registered and paid the service tax, but the Joint Commissioner later determined that the activity was not taxable. As a result, the Tribunal held that the extended period of limitation was not applicable, and the demands were considered barred by limitation. Consequently, the appeal was allowed with any necessary consequential relief.