2015 (5) TMI 382 - AT - Service Tax

Vocational training institutes - Exemption under Notification No.9/2003-ST, dated 20.06.2003 - Suppression of facts - Held that - Appellants have been keeping the Department informed about their activities and therefore it is prima facie difficult to sustain the charge of willful statement/suppression of facts. Further, the Joint Commissioner himself vide letter dated 05.10.2005 informed the appellants that they qualified for the exemption on the training imparted by them. Indeed, CBEC itself vide its circular No. 59/8/03-ST, dated 20.06.2003 held that the institutes like the appellants' are eligible for exemption as vocational training institute. While the Board circulars do not have the authority to expand or curtail the scope of a Notification, prima facie , the Board's later circular No. 107 /01/2009 , dated 28.01.2009 may not represent the correct legal view in-as-much-as the training imparted by them actually enables the trainees to seek employment directly as a result of training; for example such trainees can seek employment directly after such training as interpreters. - appellants have made out a good case for complete waiver of pre-deposit of the impugned liabilities and we order accordingly staying the recovery thereof during pendency of the appeal - Stay granted.

Summary

Issues:
1. Stay application for service tax demands and penalties.
2. Exemption eligibility under Notification No.9/2003-ST and subsequent notifications.
3. Classification as a vocational training institute.
4. Time-bar defense against demands.
5. Interpretation of communication skills training for employment.

Stay Application:
The appellants filed a Stay Application against service tax demands confirmed under Order-in-Original No.151-52/GB/2013. They argued for early hearing due to Revenue's demand for recovery. The Tribunal allowed the Miscellaneous Application for early hearing.

Exemption Eligibility:
The appellants provided foreign language training and claimed exemption under Notification No.9/2003-ST. They communicated with authorities regarding exemption extensions and service tax payments. The Tribunal noted the history of exemptions and communications with the department.

Classification as Vocational Training Institute:
The appellants contended that their training qualified as vocational training under relevant Notifications. They argued that their training enabled trainees to seek employment directly, meeting the definition of a "vocational training institute." The Tribunal analyzed past circulars and communications supporting the appellants' eligibility for exemption.

Time-Bar Defense:
The appellants asserted no misstatement or suppression, potentially affecting the demands' time-bar status. The Tribunal considered the time-bar implications in relation to the demands raised under Show Cause Notices.

Interpretation of Communication Skills Training:
The Departmental Representative argued that the appellants' communication skills training did not directly enable trainees to seek employment. Reference was made to a Board circular. The Tribunal examined the nature of training provided by the appellants and its employment-enabling aspects. It cited a precedent where similar circumstances led to a waiver of pre-deposit requirements.

In conclusion, the Tribunal found in favor of the appellants, noting their compliance with reporting requirements and past communications with authorities. It highlighted the enabling nature of the training provided by the appellants, leading to a decision to waive pre-deposit requirements and stay the recovery of liabilities during the appeal's pendency.