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2019 (2) TMI 93 - AT - Service TaxCommercial training or coaching services - vocational training services - Benefit of N/N. 09/2003- ST and 24/2004-ST. - whether the appellant who provides training in management are covered by the definition of commercial training or coaching services and consequently, whether the courses conducted by them are liable to be taxed as such? - exemption up to September, 2010 allowed or not? Held that - This matter had gone up to the Hon ble Supreme Court and on remand CESTAT-Bangalore in M/S. THE INSTITUTE OF CHARTERED FINANCIAL ANALYSTS OF INDIA, HYDERABAD (ICFAI) VERSUS CC&CE, HYDERABAD 2013 (6) TMI 446 - CESTAT BANGALORE held that three co-appellants in the case viz., ISB (appellant herein), the Institute of Chartered Financial Analysts of India and Badruka Institute of Foreign Trade were commercial training and coaching institutes. The matter was remanded back to the Commissioners only with respect to examining the availability of the benefit of notifications 9/2003-ST & 24/2004-ST. Benefit of exemption notifications - Held that - Both these exemption notifications are available for vocational training institutes which have been defined as in commercial training or coaching centre which provide vocational coaching or training that imparts skills to enable the trainee to seek employment or undertaken self employment directly after such training or coaching. We cannot think of a more practical job or self employment oriented training or coaching than management courses conducted by the appellant. The demand for the period July, 2003 to September, 2010 needs to be set aside - As far as the period October, 2010 to September, 2011 is concerned, the demand needs to be upheld as it is not covered by any exemption notification - The appropriate rate of interest has also to be paid - The question of penalty does not apply in this case as it is a demand for normal period under Section 78 - appeal allowed in part.
Issues Involved:
1. Liability to pay service tax on 'commercial training or coaching services'. 2. Invocation of extended period of demand. 3. Eligibility for benefit of exemption notifications Nos. 09/2003-ST and 24/2004-ST. Issue-wise Detailed Analysis: 1. Liability to Pay Service Tax on 'Commercial Training or Coaching Services': The Tribunal-Bangalore previously held that the appellant is liable to pay service tax under Sec. 65(105)(zzc) of the Finance Act, 1994, as amended retrospectively from 01.07.2003. The Tribunal emphasized that the term "commercial" encompasses the appellant's activities, rendering them eligible for service tax. The courses provided by the appellant were not recognized by law, and thus, the appellant's activities were classified as 'commercial training or coaching services'. The Tribunal's decision was based on the retrospective amendment and the broad scope of the explanation to Sec. 65(105)(zzc). 2. Invocation of Extended Period of Demand: The Tribunal upheld the invocation of the extended period of demand under the proviso to Sec. 73(1) of the Act, citing suppression of facts by the appellant with intent to evade payment of service tax. The Tribunal referenced the decision in CCE v. Mehta & Co, which supports the application of the extended period from the date of acquisition of knowledge by the department. 3. Eligibility for Benefit of Exemption Notifications Nos. 09/2003-ST and 24/2004-ST: The lower authority denied the benefit of exemption notifications to the appellant. The appellant argued that they qualify as a vocational training institute, which imparts skills enabling trainees to seek employment directly after training. However, the lower authority held that the appellant's courses were academic and educational, not vocational, as they were based on intellectual lectures and bookish literature rather than non-academic skills. The appellant contended that their programs, which include management and executive education, are vocational as they lead to direct employment. The Tribunal, however, found that the appellant's courses do not fit the general understanding of vocational training, which typically involves non-academic skills. Additional Grounds Pleaded by the Appellant: The appellant argued that they are a non-profit organization and not a commercial concern, exempt from income tax, and associated with leading international business schools. They also claimed that similar institutions like IITs and IIMs are not considered commercial concerns. The appellant highlighted that they voluntarily registered for service tax but later contested the liability. Tribunal's Final Decision: The Tribunal concluded that the appellant is entitled to the benefit of exemption notifications 09/2003-ST and 24/2004-ST for the period July 2003 to September 2010, setting aside the demand for this period. However, the demand for the period October 2010 to September 2011 was upheld, as it was not covered by any exemption notification. All penalties were set aside, and the appeal was disposed of accordingly. Summary of Orders: a) The demand for service tax for the period July 2003 to September 2010 is set aside. b) The demand for the period October 2010 to September 2011 is upheld. c) All penalties are set aside.
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