2013 (11) TMI 458 - AT - Service Tax

Demand of service tax - Commercial Training and Coaching service - Assessee provided training in field of Export-Import, Merchandising and Retail Management and claimed exemption under Commercial Training or Coaching Service - by virtue of Notification 9/2003 and 24/2004 - Revenue argued that such training cannot be considered as Vocational - Held That - In view of Wigan & Leigh College (2007 -TMI - 2307 - CESTAT, BANGALORE) and Ashu Export Promoters (P.) Ltd. Versus Commissioner of Service tax, New Delhi 2011 (11) TMI 387 - CESTAT, NEW DELHI , service were considered as vocational - stay granted.

Summary

Issues:
Interpretation of exemption Notification No. 24/2004-ST for vocational training courses.
Applicability of retrospective effect of the explanation carried out by Notification No. 3/2010-ST.
Nature of hotel management and catering courses as vocational training.

Analysis:
The judgment pertains to an appeal before the CESTAT Chennai involving the classification of training services provided by an institute in the field of hotel management and catering. The Revenue contended that the training fell under Commercial Training and Coaching services taxable under Section 65(105)(zzc) of the Finance Act, 1994. Two show cause notices were issued for non-payment of service tax for specific periods, leading to confirmed amounts against the applicant along with interest and penalties.

The main issue revolved around the interpretation of exemption Notification No. 24/2004-ST for vocational training courses. The applicant argued that their services qualified as vocational training courses as per the exemption, emphasizing that the demands were confirmed based on an amendment introduced by Notification No. 3/2010-ST, which should not have retrospective effect. The applicant cited relevant decisions supporting their position, seeking admission of the appeals without pre-deposit of dues from the impugned order.

The Revenue opposed the applicant's stance, asserting that the nature of hotel management and catering courses did not align with vocational training courses, even under the amendment introduced by Notification No. 3/2010-ST. However, the Tribunal, after considering both arguments, highlighted that the explanation in the said notification was not given retrospective effect by the legislature. Citing a precedent, the Tribunal emphasized that explanations broadening the tax base and adversely affecting taxpayers cannot be retrospectively amended by implication.

Consequently, the Tribunal was inclined to view the demand as unsustainable, drawing on detailed findings from previous cases. As a result, the requirement for pre-deposit was waived for the admission of the appeal, and a stay was granted on the collection of dues during the appeal's pendency. The judgment underscored the importance of legislative intent regarding retrospective amendments and the need for a clear interpretation of relevant notifications in determining the taxability of specific services.