2009 (8) TMI 390 - AT - Service Tax

Commercial training or coaching services- Computer software services-Notification No. 9/2003-ST, dated 20.06.2003- The assessee was engaged in imparting education in the branches of biotechnology and pharmacy through software. The original authority found that the assessee had rendered taxable service classifiable under commercial training or coaching during the period from 1.7.2003 to 30.09.2004. He rejected the assessee s claim that the training imparter was computer software services exempt vide Notification No. 9/2003-ST dated 20.06.2003. Commissioner (Appeals) also affirm the order of original authority. Held that- the claim for exemption classifying the appellants as vocational training institute under Notification No. 9/2003, dated 20-6-2003 is canvassed before us for the first time in the proceedings. Such a claim was not made before the lower authorities. In the circumstances, to remand the matter for fresh adjudication by the original authority. Appeal is allowed by way of remand back.

Summary

Issues:
1. Whether the services provided by M/s. Bio Campus qualify as "computer software training" exempt from service tax under Notification No. 9/2003.
2. Whether M/s. Bio Campus can be considered a vocational training institute eligible for exemption under Notification No. 9/2003.
3. Imposition of penalties under sections 76, 77, and 78 of the Finance Act, 1994.

Analysis:

Issue 1:
The original authority found that M/s. Bio Campus had rendered taxable services under 'Commercial Training or Coaching' during a specific period and had not followed statutory formalities, leading to a demand for service tax. The Commissioner (Appeals) affirmed this finding, stating that the training provided by Bio Campus was specialized and not merely computer software training. The appeal argued for exemption under Notification No. 9/2003, claiming that the training was solely in software use. However, the Tribunal observed that Bio Campus imparted specialized knowledge in various scientific fields using software, not just software application training. The claim for exemption as "computer software training" was rejected.

Issue 2:
The appeal also contended that Bio Campus should be considered a vocational training institute eligible for exemption under Notification No. 9/2003. The Tribunal noted that this claim was raised for the first time during the appeal proceedings and not before the lower authorities. It was observed that the training provided by Bio Campus did not equip students for employment or self-employment, as argued by the learned SDR. The Tribunal decided to remand the matter for fresh adjudication, allowing Bio Campus to present evidence of successful students obtaining employment based on their course completion.

Issue 3:
Regarding the penalties imposed under sections 76, 77, and 78 of the Finance Act, 1994, the appeal sought a waiver, citing no mala fide intention to evade tax. The Tribunal noted that penalties are not imposable if non-payment of tax was without intent to evade payment. The appeal was allowed by way of remand, indicating a fresh adjudication on the penalties.

In conclusion, the Tribunal upheld the decision that the services provided by M/s. Bio Campus did not qualify for the claimed exemptions and remanded the matter for further consideration on the vocational training institute status and penalties imposed.