2018 (3) TMI 699 - AT - Service Tax

Applicability of the N/N. 9/2003 as amended - Commercial Training and Coaching services - Held that - The scope of term vocational training institute which is redefined only in 2010. On plain reading of exemption it is seen that those courses which provide such skills to the trainee to seek employment directly after such training or coaching shall be excluded from tax liability - the present courses are covered by such exemption in the said notification - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Applicability of Notification No.9/2003 for exemption of service tax on vocational courses provided by a training institute.

Analysis:
The appeal before the Appellate Tribunal CESTAT Chennai challenged the order of the Commissioner of Central Excise, Chennai-IV regarding the tax liability of an institute providing Commercial Training and Coaching in Hotel Management and Catering Technology. The institute offered training programs in Hotel Operations Management and claimed exemption from service tax under Notification No.9/2003 and 24/2004. The appellants argued that their courses were vocational in nature, intended for specific industry sectors, and led to direct employment opportunities. The dispute centered around whether the courses qualified as vocational courses exempted from service tax.

The appellants contended that their courses were vocational in nature, specifically designed for employment in a particular industry, and presented testimonials to support the claim that trainees secured employment in their specialized areas. On the other hand, the Revenue Authority argued that the courses were not vocational but more akin to academic diplomas, falling under the tax entry for such courses.

The Tribunal analyzed the scope of the exemption under Notification No.9/2003, particularly focusing on the 2010 amendment that limited the exemption to work and trade recognized by the Apprentice Act, 1961. The Tribunal noted that the dispute pertained to a period before the 2010 amendment and found that the courses offered by the institute were indeed vocational in nature, distinct from academic courses like PGDM/MBA. The Tribunal referenced previous decisions and held that the courses provided skills for direct employment, aligning with the exemption criteria. The Tribunal emphasized that the courses were not equivalent to general academic courses, further supporting their eligibility for exemption.

Ultimately, the Tribunal set aside the lower authority's decision, allowing the appeal and ruling in favor of the institute. The Tribunal concluded that the courses fell within the exemption under Notification No.9/2003, considering the vocational nature of the training provided and the direct employment opportunities it offered to the trainees.