2018 (7) TMI 265 - AT - Service Tax

Commercial Training and Coaching Services - the assessee M/s. National Maritime Academy (renamed as Indian Marine University since 2008) were rendering training on various courses to the officials of the Major Ports, Minor Ports and National Highway of India - Held that - The courses offered by the assessee are recognized by law being courses run under approval of Government, the demand is without legal basis - demand cannot sustain - appeal allowed - decided in favor of appellant.

Summary

Issues:
Classification under Commercial Training and Coaching Services for course fees collected by National Maritime Academy; Liability to pay service tax for the period from 2003-04 to 2007-08; Setting aside of penalties under section 80 of the Finance Act, 1994.

Analysis:
The appeals involved the consideration of whether the activities of the National Maritime Academy, now renamed Indian Marine University, in providing training on various courses to officials of major and minor ports and the National Highway of India should be classified under Commercial Training and Coaching Services, thereby making the assessee liable to pay service tax for the period from 2003-04 to 2007-08. The department issued a show cause notice proposing the demand of service tax, interest, and penalties. The original authority confirmed the demand, interest, and penalties, which was upheld by the Commissioner (Appeals) except for setting aside the penalties under section 80 of the Finance Act, 1994.

The assessee contended that the marine courses were approved by Government of India authorities, and no further statutory approval was required. The courses were not commercial in nature, as the National Maritime Academy was established to provide training to officials/employees of major and minor ports and the National Highway Authority of India. The academy operated on a no-profit-no-loss basis, with expenses being met by the Indian Ports Association. The courses offered were approved by the Directorate General of Shipping, Ministry of Shipping, and certificates were issued under government directions. Therefore, the assessee argued that the activities did not fall under Commercial Training or Coaching Services, and thus, they were not liable to pay service tax.

Upon careful consideration of the records and certificates issued for various courses, the Tribunal noted the approvals granted by the Ministry of Surface Transport and Directorate General of Shipping under the auspices of the Government of India. The Tribunal also took into account a previous order where the Commissioner (Appeals) for a subsequent period had dropped proceedings. Given the recognition of the courses by law and the approvals from government authorities, the Tribunal concluded that the demand for service tax lacked a legal basis. Citing a similar issue analyzed in a previous Tribunal order, the Tribunal set aside the demand, allowing the appeal filed by the assessee and dismissing the appeal by the Revenue for imposing penalties under section 80 of the Finance Act, 1994.