2014 (7) TMI 1050 - AT - Service Tax

Commercial coaching and training centre - vocational coaching services - Exemption Notification No. 24/2004-ST dated 30/06/2004 - Held that - Technology based training for employment skill development, the training courses for medical transcriptionist, insurance agents etc. are vocational course which enable the persons receiving such training to get direct employment or get self-employed. Therefore these training courses though imparted with the aid to computers cannot be treated as computer training courses and, hence, would be eligible for exemption under Notification No. 24/2004-ST. - stay granted. Cenvat credit demand of ₹ 81,476/- the same is based on the allegation that though the appellant provide taxable services as well as fully exempt services and have used common inputs/input services in respect of the same, they have not maintained separate account in this regard and have not confined the Cenvat credit availment only to the input services meant for taxable services. Though the appellant plead that they were maintaining separate account of inputs/input services, prima facie no evidence in this regard has been produced. Therefore, on this count, the appellant have not established prima facie case in their favour - stay granted partly.

Summary

Issues:
1. Whether the appellant's training courses qualify for service tax exemption under Notification No. 24/2004-ST.
2. Whether the appellant's Cenvat credit utilization complies with the rules and justifies waiver from pre-deposit requirements.

Analysis:

Issue 1: The main contention was whether the appellant's training courses, including technology-based training for skill development, medical transcription training, and training for insurance agents, qualified as vocational courses for service tax exemption under Notification No. 24/2004-ST. The appellant argued that their courses were not solely computer training and should be exempt. The Tribunal agreed, stating that the courses enabled direct employment or self-employment, making them vocational in nature, thus qualifying for the exemption.

Issue 2: The second issue revolved around the appellant's Cenvat credit utilization and the demand of Rs. 81,476 based on alleged non-compliance with maintaining separate accounts for inputs used in taxable and exempt services. The appellant claimed they maintained separate accounts, but the Department argued otherwise. The Tribunal found no prima facie evidence of separate account maintenance, leading to a lack of case establishment by the appellant. Consequently, the Tribunal directed the appellant to pay Rs. 40,000 with interest within four weeks, in addition to the amount already paid. Failure to comply would result in dismissal of the appeal. Upon payment, the requirement for pre-deposit of the remaining amount, interest, and penalty would be waived, and recovery stayed.

In conclusion, the Tribunal upheld the exemption for the appellant's training courses as vocational, qualifying for service tax exemption. However, the appellant failed to establish proper compliance with Cenvat credit rules, leading to a directive to pay a specified amount within a set timeframe to avoid dismissal of the appeal and waiver of the remaining pre-deposit requirements.