2023 (6) TMI 305 - AT - Service Tax

Classification of services - coaching and training services in Foreign Trade and Business Management - Department alleged that the coaching and training services provided by the Appellant did not fall under the category of Vocational Training and accordingly, the Appellant cannot be classified as vocational training institute - N/N. 09/2003-ST dt.20.06.2003 - period July, 2003 to September, 2005. HELD THAT - It is observed that the very issue as to whether any coaching and training given in respect of business management studies would call for Service Tax payment, has been gone into by the Tribunal in the case of Ashu Export Promoters (P) Ltd 2011 (11) TMI 387 - CESTAT, NEW DELHI and the Tribunal has held In relation to education and training it gives the meaning directed at a particular occupation or its skill . When engagement in occupation or employment becomes outcome of vocational training, pedantic approach as that is made by Revenue is undesirable. On Appeal against this Tribunal s Order, the Hon ble High Court of Delhi 2014 (3) TMI 863 - DELHI HIGH COURT has 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. The Appeal filed by the Revenue against this Tribunal s Order was dismissed by the Hon ble Supreme Court 2018 (8) TMI 826 - SC ORDER holding that It was further held that the order of the Tribunal passed in remand direction of the Supreme Court cannot be set aside by the Tribunal on the ground that the same was contrary to its earlier order passed on the basis of same set of facts and in the same matter, particularly when such order was under consideration before the Supreme Court and no stay thereagainst had been granted. The confirmed demand for the period July, 2003 to 27.02.2010 is required to be set aside. Accordingly, the Appeal to this extent is allowed - The confirmed demand of Rs.43,01,656/- is being remanded to the Adjudicating Authority to go through the details of the demand and verify the submissions of the Appellant that the services pertain to coaching and training given by them to the students leading to issuance of proper diplomas/ degrees by JNTU. The Appellant is directed to provide all the necessary data that would be sought by the Adjudicating Authority while disposing of the Denovo proceedings. Appeal disposed off.

Summary

Issues Involved:

1. Classification of the appellant's services as "vocational training" for exemption under Notification No. 09/2003-ST.
2. Applicability of amended definition of "vocational training institute" post Notification No. 03/2010-ST.
3. Eligibility for exemption for services leading to recognized degrees or diplomas post 28.02.2010.
4. Verification of the demand amount pertaining to services leading to issuance of diplomas/degrees by JNTU.

Summary:

Issue 1: Classification of Services as "Vocational Training" (July 2003 to September 2005)
The appellant provided coaching and training services in Foreign Trade and Business Management and claimed exemption under Notification No. 09/2003-ST, which defined "vocational training institute" as a center imparting skills for employment or self-employment. The Tribunal referenced the case of Ashu Export Promoters (P) Ltd vs CST, New Delhi, where it was held that business management coaching resulting in occupation or employment qualifies as vocational training. Consequently, the Tribunal allowed the appeal for the period July 2003 to September 2005, setting aside the demand.

Issue 2: Applicability of Amended Definition Post Notification No. 03/2010-ST (October 2005 to February 2010)
The amended definition of "vocational training institute" effective from 27.02.2010 required affiliation to the National Council for Vocational Training. The Tribunal held that this amended definition cannot be applied retrospectively to the period before 27.02.2010. Thus, the appellant was eligible for exemption till 27.02.2010, and the demand for this period was set aside.

Issue 3: Exemption for Recognized Degrees or Diplomas (February 2010 to December 2011)
For the period post 28.02.2010, the appellant argued that services leading to recognized degrees or diplomas were exempt from Service Tax. The Tribunal noted that Rs.18,18,608/- of the confirmed demand pertained to services leading to diplomas from JNTU, which should be considered under Notification No.33/2011. The Tribunal remanded this part of the demand to the Adjudicating Authority for verification.

Issue 4: Verification of Demand Amount (February 2010 to December 2011)
The Tribunal directed the Adjudicating Authority to verify the appellant's claim that the services provided led to recognized diplomas/degrees by JNTU. The appellant was instructed to provide necessary data for verification. The balance amount not covered under the exemption would be payable with interest and penalty as per Section 76 of the Finance Act, 1994. The proceedings were to be completed within four months.

Conclusion:
The appeals were disposed of with the demand for the period July 2003 to 27.02.2010 set aside, and the demand for the period 28.02.2010 to 31.12.2011 remanded for verification.