2018 (6) TMI 806 - AT - Service Tax

Classification of services - Appellant is engaged in conducting various courses some of which are approved by the AICTE or by Education Institute of American Hotel and Lodging Institute (EL AHLA) or by International Air Transportation Institute (IATA) - whether the services would be taxable under the head commercial coaching and training services or otherwise? - Held that - During the relevant period not only the degree/ diploma courses recognized by the University were exempted from Service Tax, but even the Vocational courses were also exempted in terms of N/N. 9/2003 ST dt. 20.06.2003. In case of courses run by Appellant in MOU with the EI-AHLA, the Appellant has provided the list of students who on completion of course were employed with the Hotels and Hospitality Industry. If a course enables the student to acquire the knowledge and skills which enables them to seek employment or undertake self employment directly after such training or coaching, the said course will be covered by the vocational training and eligible for the exemption. The Appellant institute is providing both theoretical as well as practical training in the filed of hotel, tourism, airlines, travel agencies and tour operators. In case of courses run under the authorization of IATA, we find that the said courses also are job oriented in nature. The GDS FARE and Ticketing is run under the affiliation of IATA which is body with Global recognized operations and such affiliation makes the students acquire skills and training to acquire employment. There is no doubt that the courses run by the Appellant institute are thus providing vocational knowledge and training and cannot be made liable for service tax during the impugned period. There is no hesitation to hold that the courses run by the Appellant institute clearly fall under the vocational training and are eligible for exemption from service tax in terms of N/N. 9/2003-S.T., dated 20-6- 2003 and 24/2004-S.T., dated 10-9-2004 - the demand and penalty against the Appellant are not sustainable - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Taxability of courses run by the appellant under the category of "Commercial Coaching Center."
2. Exemption eligibility of the appellant's courses under the definition of vocational training as per Finance Act / Service Tax Rules.
3. Validity of the demands and penalties imposed on the appellant.

Issue-Wise Detailed Analysis:

1. Taxability of Courses Under "Commercial Coaching Center":
The appellant was engaged in conducting various courses, some approved by AICTE, EI-AHLA, and IATA. The Revenue issued Show Cause Notices for the periods from 01.07.2003 to 31.03.2006 and 01.04.2006 to 31.03.2007, demanding service tax along with interest and penalty, claiming the appellant's activities fell under the "Commercial Coaching Center" category. The Additional Commissioner confirmed the demand for courses run under Manipal IT Education's permission and those recognized by EI-AHLA and IATA, stating that NCHMCT was not authorized to approve the appellant's courses, and the courses did not result in certificates or diplomas recognized by law in India.

2. Exemption Eligibility Under Vocational Training:
The appellant argued that their courses were exempt under the Finance Act / Service Tax Rules as they constituted vocational training. The Tribunal noted that during the relevant period, vocational courses were exempt from service tax under Notification No. 9/2003-ST dated 20.06.2003. The Tribunal found that the courses enabled students to acquire skills for employment or self-employment, thus qualifying as vocational training. The Tribunal relied on previous judgments, including Wigan & Leigh College (India) Ltd. vs. Joint Commissioner, Hyderabad, which supported the exemption for vocational training.

3. Validity of Demands and Penalties:
The Tribunal examined the nature of the courses and concluded that they provided vocational training, which was exempt from service tax. The Tribunal referred to several judgments, including Canon School of Catering and Hotel Management and ANURAG SONI vs. CCE, BHOPAL, which affirmed the exemption for vocational training institutes. The Tribunal held that the courses run by the appellant under EI-AHLA and IATA affiliations were job-oriented and provided vocational knowledge and training, thus exempt from service tax. Consequently, the Tribunal set aside the demand and penalties imposed on the appellant.

Conclusion:
The Tribunal concluded that the courses run by the appellant institute fell under vocational training and were eligible for exemption from service tax as per Notification No. 9/2003-ST dated 20.06.2003 and 24/2004-ST dated 10.09.2004. The impugned order was set aside, and the appeal was allowed with consequential reliefs.