2019 (2) TMI 1247 - AT - Service Tax

Vocational institute or not - professional training to individuals in the field of foreign trade for a consideration at Madurai, Coimbatore and Chennai - Department was of the view that the appellant s institute is not a vocational institute as the participants do not immediately qualify for employment or for self-employment - Held that - The appellant has rendered professional training relating to various procedures and statutory compliances to be made in relation to export / import of goods in the field of foreign trade. The training course is designed in such a way that all procedures, statutory requirements, foreign trade policy of the Government, prospective industries and area of export / import etc. are made familiar to the participants - they squarely fall within the definition of vocation training institute in the Explanation (i) of Notification 9/2003-ST dated 20.6.2003 and 24/2004-ST dated 10.9.2004 to qualify for exemption from taxability under Commercial Training or Coaching Service. There cannot be any tax liability for the predominant period of dispute, except for the period between 1.7.2004 and 9.9.2004 under Commercial Training and Coaching service - However, for the period from 1.7.2004 to 9.9.2004, the matter requires to be remanded back to the adjudicating authority to calculate the tax liability for that period - appeal allowed by way of remand.

Summary

Issues:
1. Whether the appellant's institute qualifies as a vocational institute for exemption from taxability under Commercial Training or Coaching Service.
2. Tax liability for the period from 1.4.2004 to 31.3.2009 and from 1.7.2004 to 9.9.2004.
3. Applicability of cum-duty benefit.
4. Imposition of penalty under various provisions of law.

Analysis:
1. The appellant conducted professional training in foreign trade but faced proceedings due to the view that their institute did not qualify as a vocational institute. The issue revolved around the participants' immediate qualification for employment or self-employment. The lower authority confirmed a service tax liability of ?2,93,315/- for the period from 1.4.2004 to 31.3.2009, along with interest and penalties. The Commissioner (Appeals) upheld this decision, leading to the current appeal.

2. During the hearing, the appellant's counsel argued that the training provided fell within the definition of a vocational training institute, making them eligible for exemption under relevant notifications. It was acknowledged that tax liability existed for the period from 1.7.2004 to 9.9.2004 due to the absence of applicable notifications during that time. The counsel cited several case laws to support their position.

3. The appellate tribunal found merit in the appellant's arguments, agreeing that the decisions referenced by the counsel supported their case when the relevant notifications were in force. As a result, there was no tax liability for the predominant period of dispute, except for the specific period mentioned. The tribunal decided to remand the matter back to the adjudicating authority to calculate the tax liability for the period from 1.7.2004 to 9.9.2004, with instructions to consider cum-duty benefits as prescribed by law.

4. Considering the prolonged litigation and the specific circumstances of the case, the tribunal ruled that no penalty would be imposed even if tax liability was reworked for the mentioned period. The impugned order was set aside, and the appeal was partly allowed and partly remanded for the limited purpose of recalculating tax liability for the specified period.