2013 (10) TMI 582 - AT - Service Tax

Demand of service tax - Vocational training - Coaching in English - Benefit of Notification no. 9/2003-ST - Held that - appellant is conducting the training in spoken English for a duration of only two weeks as can be seen from their advertisements. When even after undergoing training in English languages for years together both in school and colleges it is difficult to attain proficiency it is inconceivable that in a matter of two weeks any proficiency or skill can be imparted or achieved by undergoing training for a mere two weeks. Thus the whole claim of the appellant lacks credibility and conviction. If the apex body dealing with vocational training National Council for Vocational Training in India itself does not consider training in languages as vocational training it is not conceivable how training in languages can be treated as a vocational training for the purpose of Notification no. 9/2003-ST or it s successor Notification no. 24/2004. The clarification issued by the Board also would not matter as the taxability is determined not by the Circulars or notifications but by the provisions of law - Following decision of UNION OF INDIA Versus WOOD PAPERS LTD. 1990 (4) TMI 55 - SUPREME COURT OF INDIA - Decided against assessee.

Issues:
1. Eligibility for the benefit of Notification no. 9/2003-ST regarding Service Tax exemption for coaching services.
2. Interpretation of the term "vocational training institute" under the notification.
3. Whether coaching in spoken English qualifies as vocational training.
4. Reliance on certificates and precedents to support the claim.
5. Comparison with the National Council for Vocational Training's criteria.
6. Application of statutory interpretation principles in determining eligibility for the exemption.

Issue 1: Eligibility for the benefit of Notification no. 9/2003-ST:
The appellant, a coaching service provider, filed a refund claim citing exemption under Notification no. 9/2003-ST for coaching in spoken English. The jurisdictional Assistant Commissioner and lower appellate authority rejected the claim, leading to the appeal. The appellant argued that English is a foreign language and thus qualifies for the exemption. However, the tribunal analyzed the notification's scope, emphasizing the need for training to enable employment directly after completion. The tribunal found the appellant's two-week course insufficient to enhance employability significantly, questioning the credibility of certificates submitted.

Issue 2: Interpretation of "vocational training institute":
The tribunal scrutinized the definition of "vocational training institute" under Notification no. 9/2003-ST, emphasizing the need for training to impart skills enabling immediate employment. It highlighted the specific trades recognized by the National Council for Vocational Training, which excludes language training. The tribunal stressed that statutory interpretation principles require strict adherence to the notification's terms as exceptions, citing a precedent to support a narrow interpretation when in doubt. Consequently, the tribunal concluded that the appellant did not meet the criteria for the exemption.

Issue 3: Qualification of coaching in spoken English as vocational training:
The appellant contended that coaching in spoken English should be considered vocational training, citing certificates and a workshop's relevance to employability. However, the tribunal found the evidence lacking, as certificates were from employed individuals and did not demonstrate direct employability post-training. The tribunal also dismissed reliance on a previous tribunal decision, clarifying its limited precedential value.

Issue 4: Reliance on certificates and precedents:
The tribunal scrutinized the certificates provided by the appellant, emphasizing their recent issuance and lack of employer validation. It dismissed the reliance on a previous tribunal decision, highlighting its preliminary nature during a stay consideration.

Issue 5: Comparison with National Council for Vocational Training criteria:
The tribunal compared the appellant's training in spoken English with the National Council for Vocational Training's specified trades, which do not include language training. It highlighted the educational qualifications and training duration set by the Council, underscoring the absence of language training as vocational under the Council's framework.

Issue 6: Application of statutory interpretation principles:
Applying statutory interpretation principles, the tribunal stressed the need for a strict interpretation of the exemption notification as an exception. Citing a legal precedent, the tribunal emphasized that once eligibility ambiguity is resolved, a wider construction may apply. However, in this case, the tribunal found the appellant ineligible for the exemption based on the notification's specific criteria.

In conclusion, the tribunal dismissed the appeal, ruling that the appellant did not qualify for the benefit of Notification no. 9/2003-ST due to the nature of the coaching service provided not meeting the criteria for vocational training under the notification.

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