2022 (10) TMI 287 - AT - Service Tax

Levy of Service Tax - Commercial Training or Coaching Service - computer training provided by the appellant to the students - period 21.06.2006 to 30.11.2009 - eligibility for small scale exemption available under the Notification No. 6/2005-ST dated 01.03.2005 - extended period of limitation - penalty - HELD THAT - There is no dispute that the appellant are franchisee of SITD and the service was also provided to the students by the SITD, therefore the appellant are providing service under the brand name of another person. Therefore, they are not eligible for small scale exemption. The appellant also raised a point that they are eligible for exemption on the vocational training service. In this regard, it is found that Computer Education service has been excluded from the Vocational Training service by Notification No. 19/2005-ST dated 07.06.2005. In this case the period involved is 21.06.2006 to 30.11.2009 therefore, the appellant is not eligible for exemption under the vocational training. Extended period of limitation - HELD THAT - For the period 21.06.2006 to 30.11.2009, the show cause notice was issued on 03.06.2010 wherein the extended period was invoked. The issue is a neat question of law involving interpretation whether the same is falling under Commercial Training or Coaching Service and it is also observed that the appellant had a bonafide belief being a very small service provider having taxable value of Rs. 1,26,200/- that too in four years, they are eligible for small scale exemption under Notification No. 6/2005-ST. Thus, the issue was also involved an interpretation of notification. Penalty - HELD THAT - The appellant have not hidden the transaction which was retrieved from their record. Considering the overall facts, the demand for extended period is not sustainable. Consequently, the penalty under section78 is also not imposable. The appellant is liable to service tax only for the normal period and demand for extended period and entire penalty is set-aside - appeal allowed in part.

Summary

Issues involved:
Determining liability for service tax under Commercial Training or Coaching Service for computer training provided by the appellant, eligibility for small scale exemption under Notification No. 6/2005-ST, exclusion from vocational training service, invocation of extended period for demand, and imposition of penalty under section 78.

Analysis:

1. Liability for Service Tax under Commercial Training or Coaching Service:
The case revolved around whether the appellant was liable to pay service tax under the category of Commercial Training or Coaching Service for providing computer training. The appellant, a Society for Information & Technology Development (SITD), offered Computer Teachers Training courses, Computerised Professional Accounting courses, and Wi-Fi net-working services. The department argued that since the appellant provided services under the brand name of SITD, they were not eligible for small scale exemption. The Tribunal noted the appellant's claim for exemption under Notification No. 6/2005-ST due to their total value being below the threshold limit. However, as the services were provided under another person's brand name, the appellant was deemed ineligible for the exemption.

2. Exclusion from Vocational Training Service:
The appellant contended that they were eligible for exemption under vocational training services. Nevertheless, the Tribunal pointed out that Computer Education services had been excluded from the Vocational Training service by Notification No. 19/2005-ST. Since the period in question was from 21.06.2006 to 30.11.2009, the appellant was not entitled to exemption under vocational training.

3. Invocation of Extended Period and Penalty Imposition:
Regarding the invocation of the extended period for demand and the imposition of penalty under section 78, the Tribunal considered whether the issue fell under Commercial Training or Coaching Service. Despite the appellant's belief that they qualified for small scale exemption, the Tribunal found the demand for the extended period unsustainable. The Tribunal noted that the appellant had not concealed any transactions and had a taxable value well below the exemption limit. Consequently, the demand for the extended period and the penalty under section 78 were set aside.

In conclusion, the Tribunal held that the appellant was liable for service tax only for the normal period, setting aside the demand for the extended period and the penalty. The appeal was partly allowed in favor of the appellant.