2014 (3) TMI 863 - HC - Service Tax

Commercial training or coaching - Whether the term vocational training institute in Notification No.24/2004 - ST covers the respondent and whether the courses offered by it are exempt for the period 01.07.2003 to September, 2008 - running courses which is to impart procedural and practical skill based training in areas such as export import management, retail management and merchandising. Concededly, these courses were not accredited or certified by any Central or State Government or statutory authority such as AICTE - Held that - It is evident that the term vocational training institute included the commercial training or coaching centers which provide vocational coaching or training meant to impart skills to enable the trainees to seek employment or to have self employment directly after such training or coaching . The notion of such training institute having been recognized or accredited to nowhere emerges from such a broad definition. The further Notification of 2010 substitutes the existing explanation to the term vocational training institute and narrowing it to those institutes affiliated to National Council for Vocational Training offering courses in designated trade in fact supports the assessee. Had the intention been to exempt only such class or category of institutions, the appropriate authority would have designed such a condition in the original Notification of 2003 and Notification No.10 of 2004 which had been relied upon in this case - Tribunal did not fall into error in following its previous ruling in Wigan & Leigh (2007 (8) TMI 61 - CESTAT, BANGALORE) - Decided against the revenue.

Summary

Issues:
Interpretation of the term "vocational training institute" in Notification No.24/2004 - ST under Section 35(G) of the Central Excise Act.

Analysis:
1. The Revenue raised a question regarding whether the respondent's courses are exempt under the term "vocational training institute" in the mentioned notification. The respondent was providing courses in areas like export-import management and retail management, which were not accredited by any government authority. The Service Tax Department alleged non-payment of service tax under Section 65(zzc).

2. Section 65(zzc) was introduced in 2003, and the respondent relied on Notifications 9/2003 and 10/2004 to argue against being covered by the section. The Tribunal referenced a previous judgment in Wigan & Leigh College case. The Revenue argued that the exemption applied to institutes like ITI and state-sponsored educational institutes, not managerial skill-based institutions like the respondent's.

3. The original definition of "commercial training or coaching" under Section 65(zzc) broadened the scope to include any training provided by a commercial center. The exemption for vocational training institutes was introduced in 2003, with subsequent amendments in 2004 and 2010, narrowing the definition to institutes affiliated with the National Council for Vocational Training offering specific courses.

4. The Tribunal's interpretation of "vocational training institute" included centers providing coaching to enable trainees to seek employment directly after training. The 2010 amendment further clarified the definition. The Court upheld the Tribunal's decision, stating that the intention of the exemption was not limited to specific accredited institutions, supporting the assessee's position.

5. The Court concluded that the Tribunal correctly followed precedent in Wigan & Leigh, and the question of law was answered in favor of the assessee. The appeal was dismissed, affirming the Tribunal's decision and the broad interpretation of "vocational training institute" under the relevant notifications.