2013 (12) TMI 1119 - AT - Service Tax

Waiver of pre deposit - Demand of service tax - Commercial Training or Coaching - Held that - As the applicants are organizing training course, seminars, workshops for consideration to improve the skills therefore prima facie, it cannot be said that the applicants are not imparting any Commercial Training or Coaching for imparting skill or knowledge or lessons on any subject - Revenue has taken into consideration the Memorandum of Association and other evidence on record which show that the applicants are undertaking the activities as mentioned in the Memorandum of Association - Conditional stay granted.

Summary

Issues:
1. Application for waiver of pre-deposit of duty
2. Definition of 'Commercial Training or Coaching'
3. Interpretation of Memorandum of Association
4. Financial hardship plea
5. Consideration of evidence in determining liability

Analysis:

Issue 1: Application for waiver of pre-deposit of duty
The applicants filed an application for waiver of pre-deposit of duty amounting to Rs. 1,04,83,664/-, interest, and penalty. The appeal was filed in 2010, and the application for waiver was listed in 2011. The tribunal noted that the filing of the application on the day of the hearing seemed to be a delay tactic. Consequently, the tribunal decided to take up the application for waiver of dues.

Issue 2: Definition of 'Commercial Training or Coaching'
The demand on the applicants was confirmed based on providing taxable services of Commercial Training and Coaching Centre. The applicants argued that they were not imparting skill or knowledge as required by the definition of 'Commercial Training or Coaching' under the Finance Act, 1994. They claimed to conduct interactive workshops for participants to find solutions to their daily life problems. However, the Revenue contended that the applicants were indeed providing training programs, supported by syllabus and program information, thereby falling under the definition of Commercial Training Centre.

Issue 3: Interpretation of Memorandum of Association
The applicants argued that the demand was solely based on their Memorandum of Association, which they believed was insufficient grounds for the demand. They relied on a previous decision where it was held that demand cannot be solely based on the Memorandum of Association. However, the tribunal found that the activities mentioned in the Memorandum of Association aligned with the evidence on record, indicating that the applicants were indeed conducting training programs.

Issue 4: Financial hardship plea
The applicants pleaded financial hardship if required to make a pre-deposit. The Revenue pointed out the significant income generated by the applicants from training courses, seminars, and workshops. Despite the financial hardship plea, the tribunal directed the applicants to deposit a substantial amount towards the demand within a specified period, considering the facts and circumstances of the case and the interest of the Revenue.

Issue 5: Consideration of evidence in determining liability
The tribunal examined the provisions of Section 65(26) and Section 65(27) of the Finance Act, 1994, defining 'commercial training or coaching' and 'commercial training or coaching centre.' Based on the evidence presented, including the syllabus, program information, and Memorandum of Association, the tribunal concluded that the applicants were indeed providing Commercial Training and Coaching Service, warranting the payment of Service Tax.

In conclusion, the tribunal directed the applicants to make a partial deposit towards the demand, with the balance being waived subject to compliance. The decision was based on a thorough analysis of the evidence, legal definitions, and financial considerations, ensuring a fair outcome for both parties involved.