2018 (8) TMI 1111 - AT - Service Tax

Commercial Training and Coaching Service - scope of vocational training - courses through Digital Magic Animation Academy (DMAA) in Drawing, Clay Modelling, Matte Printing, Animation and Visual Effects, Still Motion Photography and Acting - N/N. 24/2004-ST dt. 10.09.2004 - Held that - As per N/N. 24/2004, service tax leviable under Commercial Training and Coaching Services are exempted for Vocational Training Institute which provides vocational training or coaching that imparts skills to enable the trainee to seek employment or undertake self-employment directly after training or coaching. From the facts on record, it is but obvious that the courses offered by the appellant satisfied the requirements of Notification 24/2004 dt. 10.09.2004. The relevant brochure has also been adduced to show that the trainees who have been provided vocational training were able to secure jobs subsequently. - The Apprentices Act, 1961 cannot be applied to the period of dispute since the concerned Notification 03/2010 was issued subsequently. Video Tape Production Services - Held that - Ihere is some confusion with respect to the quantum of demand. While the adjudicating authority has confirmed the service tax liability of ₹ 16,29,611/- based on Annexure-II to the Show Cause Notice, another Annexure-A of the same Notice had given a reduction of ₹ 1,68,991/- on account of input credit and indicated the net tax liability proposed as ₹ 14,60,620/- - matter remanded for reconsideration - penalty on this issue will be revised as per the re-quantification. Other penalties set aside. Appeal allowed in part and part matter on remand.

Summary

Issues:
1. Applicability of exemption under Notification 24/2004-ST for service tax liability on vocational training courses.
2. Dispute regarding service tax liabilities for Video Production Services.
3. Penalty imposition on various demands.

Analysis:
1. The case involved a dispute over the service tax liability of an appellant providing vocational training courses under Digital Magic Animation Academy (DMAA). The Department contended that the courses did not improve technical skills and hence were not eligible for exemption under Notification 24/2004-ST. The appellant contested the demand of ?30,73,675/- with interest, citing the vocational nature of the courses and employment opportunities provided post-completion. The Tribunal analyzed the definitions under the Notification and found in favor of the appellant, stating that the courses satisfied the requirements of the Notification in force during the dispute period, thus exempting the appellant from the said demand.

2. Regarding the service tax liabilities for Video Production Services, a discrepancy arose in the quantum of demand. While the adjudicating authority confirmed a liability of ?16,29,611/-, another annexure indicated a reduced liability of ?14,60,620/-. The Tribunal remanded this issue to the authority for clarification on the exact tax liability to be paid by the appellant.

3. In terms of penalties, the Tribunal noted that the appellant had paid up certain demands, except for the Video Tape Production Services. For the latter, the appellant had collected service tax from customers and conceded the liability. The Tribunal ordered an equal penalty based on the final quantification of the tax liability, whether ?16,29,611/- or ?14,60,620/-. Penalties under Section 70 and 77 were upheld, while penalties for other demands were set aside due to mitigating factors.

In conclusion, the Tribunal partly allowed the appeal, setting aside the demand under Commercial Coaching and Training Services, revising penalties, and remanding the issue of Video Production Services for re-quantification. The judgment provided a detailed analysis of each issue, considering the legal provisions and factual contentions presented by both parties.