2014 (12) TMI 663 - AT - Service Tax

Commercial training or coaching services - benefit of small scale exemption Notification No. 6/05-ST does not stand extended by lower authorities on the ground that the services provided by them are the branded services and as such excluded from the applicability of the notification - Bar of limitation - Held that - There is a clear finding by the Appellate Authority about the absence of malafide on the part of the appellant, the same finding would be applicable for the purpose of limitation. If there was no malafide for the purpose of penalty, there cannot be any malafide for the purpose of limitation also. Accordingly, we set aside the impugned order on the ground of demand being barred by limitation - Decided in favour of assessee.

Summary

Issues:
1. Confirmation of demand of service tax and penalty for providing commercial training or coaching services.
2. Applicability of small scale exemption Notification No. 6/05-ST.
3. Imposition of penalty under Section 76 of the Finance Act.
4. Absence of malafide intent and its impact on limitation for penalty and demand.

Analysis:

1. The judgment addresses the confirmation of demand of service tax and penalty for providing commercial training or coaching services. The lower authorities had confirmed a demand of service tax and imposed a penalty based on the appellant's provision of these services during a specific period. The appellant challenged this on the ground of limitation, citing the issuance of a show cause notice in 2009 for a period dating back to 2005-2007.

2. The appellant contended that the benefit of small scale exemption Notification No. 6/05-ST should apply to them. The appellant had informed the department in a letter dated July 12, 2004, that they were providing computer education under the franchise of APTECH LTD. MUMBAI. However, the lower authorities did not extend the small scale exemption on the basis that the services provided were branded and excluded from the notification.

3. The judgment also delves into the imposition of a penalty under Section 76 of the Finance Act. The Commissioner (Appeals) set aside the penalty, considering the appellant's submission that they believed they were entitled to Notification No. 6/2005-ST and promptly paid the due tax and interest upon being notified by the department. The absence of malafide intent on the appellant's part was emphasized, referencing a relevant case law.

4. The judgment concludes by emphasizing the absence of malafide intent on the part of the appellant, which influenced the decisions regarding both the penalty and the limitation for the demand. The Appellate Authority's finding of no malafide intent in relation to the penalty was extended to the limitation aspect as well. Consequently, the impugned order was set aside on the grounds of demand being barred by limitation, and the appeal was allowed with any consequential relief.

This detailed analysis of the judgment provides insights into the issues of demand confirmation, applicability of exemptions, penalty imposition, and the impact of malafide intent on both penalty and limitation aspects as addressed in the legal proceedings.