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TMI Blog2019 (5) TMI 1249X X X X Extracts X X X X X X X X Extracts X X X X ..... viding commercial training or coaching for imparting skill or knowledge or lessons on any subject or field. The holding of a test cannot by any stretch of imagination, be considered as imparting skill or knowledge or lessons on any subject or field. To arrive at a conclusion that the Appellant was conducting coaching or commercial training activity it was imperative for the Commissioner to have based his conclusion on some positive evidence in this regard, rather than drawing such an inference. In any case, for levy of service tax, there has to be an evidence that the Appellant was conducting commercial coaching or training. The contention of the learned Authorized Representative of the Department that the holding of the Test is itself a skill and, therefore, the Appellant is providing commercial training or coaching cannot also be accepted. No skill or knowledge is being provided to the candidates appearing at the test. Appeal allowed - decided in favor of appellant. X X X X Extracts X X X X X X X X Extracts X X X X ..... service during the relevant period i.e. April, 2012 to June, 2012 and, therefore, no service tax was paid by it. 4. Earlier, a demand cum show cause notice dated 17 April, 2013 was issued to the Appellant for the period 2007-08 & 2011-12, since during the course of audit the following discrepancies were noticed:- i. Non-payment of Service Tax on commission income received in convertible foreign exchange but in respect of Service provided in India to service recipients located outside India. ii. Irregular availment of CENVAT Credit on the strength of invoices which were not addressed to the registered premises of the assessee. iii. Non-payment of Service Tax on Income received for providing training to students for taking IELTS Test. 5. Subsequently, another demand cum show cause notice dated 6 May, 2014 was issued to the Appellant for the period commencing 1 April, 2012 upto 31 March, 2013. This notice was restricted to the income received by the Appellant for conducting the IELTS test. It needs to be noticed that the Appellant started paying Service Tax on the income received for conducting IELTS test from July 2012 onwards after introduction of the negative list of Servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st as the test had been outsourced to a sub-contractor. The Commissioner also noticed that the official website of the Appellant shows that the Appellant is conducting the IELTS test and also providing advice, practice questions and holding classes and seminars to help the students for better preparation which, clearly shows that the Appellant is providing training to the students. The relevant paragraphs of the Order of the Commissioner are reproduced below:- 4.9. To better understand the business module of the notice, I have gone through the IELTS Centre Agreement dated 09.09.2010 entered into between the notice and IELTS Australia Pvt. Limited CAN 008 664 766. I find that ₹ 7,200/- per candidate has been fixed as IELTS Test fee under the agreement. Out of this amount of ₹ 7,200/-, as per Schedule 1 to the said agreement, Australia Pvt. Limited shall be entitled to get of ₹ 3,600/- per student on which the notice has been paying service tax under franchise service under reverse charge. The rest amount of ₹ 3,600/- (₹ 7,200/-(-) ₹ 3,600/-) is being retained by the noticee. I observe that the notice has sub- contracted the activity of conductin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment that the Noticee trained/coached student does not stand to any reason and is devoid of merit. I find that the contention of the notice does not hold good as from the website it is clear that they were not working as invigilator but also as a counselor and providing training to the students online for better preparation of IELTS tests. Hence, services provided by the Noticee cannot be limited to invigilator services but the services of the Noticee are beyond that. Hence, I am of the considered view that the services provided by the notice were taxable under 'Commercial Training or Coaching Service' as defined under Section 65(26) of the Finance Act, 1994. Therefore, contention of the notice that 'details mentioned on the invoice cannot determine the taxability of the transaction' cannot be accepted because it is not merely the language used on the invoice but other facts, as mentioned above, also substantiate the taxability of their activity. Hence, services of the Noticee are taxable under 'Commercial Training or Coaching Service' beyond any doubt. (emphasis supplied) 8. Shri A.R. Madhav Rao, learned counsel for the Appellant has made the following submissions:- (i) That ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y mutantis-mutandis; and (iv) That holding of the test itself is a skill and, therefore, would fall under the category of commercial training or coaching service. 10. We have considered the submissions advanced by the learned counsel for the Appellant and the learned Authorized Representative of the Department. 11. The Appellant claims to be conducting the IELTS Test in India. This test was developed by British Council, the University of Cambridge and IELTS Australia Pty Ltd. This test is an internationally recognized english language proficiency test and measures the ability of individuals to communicate in english. The test is primarily undertaken by individuals who desire to study or work in a country where english is the main language of communication. In order to certify competency in english, IELTS Australia, as a co-owner of the IELTS Test, develops and administers the test. This test was initially conducted IELTS Australia Pty Ltd. prior to October, 2010 through Planet Education Exams Pvt. Ltd. but from October, 2010 the Appellant was granted a license to conduct the test in India in terms of the agreement dated 9 September, 2010. 12. It would, therefore, be useful to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is intended for use by their parties (for example, marketing materials); and (d) avoid behavior that may be characterized as undue influence of favouritism, whether actual or perceived. " 14. Clause 7 of the agreement deals with premises and is reproduced below: "7. Premises Responsibility for Premises 7.1. The IELTS Centre will operate the Test Centers at locations in India in accordance with the IELTS Manual of Procedure ("Premises"). 7.2. The IELTS Centre is responsible for maintaining the security of all Licensed IP, IELTS Data, Confidential Information, personal security requirements notified by IA from time to time. Standards of Premises 7.3. The IELTS Centre will ensure that the Premises are, at all times in a condition that is appropriate for the operation of a Test Centre in accordance with the requirements set out in the IELTS Manuals of Procedure. " 15. Clause 8 of the agreement deals with personnel and is reproduced below: "8. Personnel Appointment of Administrators/Test Delivery Personnel 8.1. The IELTS Centre is responsible for ensuring the Administrators/Test Delivery Personnel comply with the IELTS Manuals of Procedure. 8.2. The IELTS Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onnel) by each IELTS Test candidate who applies for an EOR during the invoicing period ("IA EOR Fees") (ii) AUD 115 of the EOR Fee paid to the IELTS Centre (or its Personnel) by each IELTS Test candidate who applies for an EOR during the invoicing period ("IA EOR Fees") (b) Any increase in the IELTS Test Fee, above INR 8,000 plus any proposed increase in the Central Fee (refer to (c) below), will be apportioned to the Test Centre and IA by mutual agreement, to be evidence in writing and signed by both parties. (c) IA will remit the Central Fee to University of Cambridge ESOL Examinations. The Central Fee is the payment made to University of Cambridge ESOL Examinations for each IELTS Test administered by an IA test centre. (d) If IELTS Test Fees are refunded, a local administrative deduction may be made and retained by the IELTS Centre, as permitted under the IELTS Administrator's Manual. (e) The IELTS Centre and IA will by mutual agreement, to be evidenced in writing and signed by both parties, determine the fee payable by the IELTS Centre to IA each IELTS preparatory course delivered by the IELTS Centre to prospective IETLS Test candidates. (f) The parties agree that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... centre" means any institute or establishment providing commercial training or coaching for imparting skill or knowledge or lessons on any subject or field other than the sports, with or without issuance of a certificate and includes coaching or tutorial classes but does not include preschool coaching and training centre or any institute or establishment which issues any certificate or diploma or degree or any educational qualification recognized by law for the time being in force;" 21. What has, therefore, to be determined is whether conduct of a test would amount to commercial training or coaching by a commercial training or coaching centre. 'Commercial training or coaching' has necessarily to be provided by a 'commercial training or coaching centre' which centre has been defined to mean any institute or establishment providing commercial training or coaching for imparting skill or knowledge or lessons on any subject or field. The holding of a test cannot by any stretch of imagination, be considered as imparting skill or knowledge or lessons on any subject or field. 22. It is, however, sought to be urged by the Department that apart from holding the test, the Appellant is also h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is required to conduct a test, then it has certainly to retain some amount for itself and it cannot be said that this amount of ₹ 550/- that remains with the Appellant is not for the activity of the holding of the test. To arrive at a conclusion that the Appellant was conducting coaching or commercial training activity it was imperative for the Commissioner to have based his conclusion on some positive evidence in this regard, rather than drawing such an inference. In any case, for levy of service tax, there has to be an evidence that the Appellant was conducting commercial coaching or training. 24. It is also not possible to accept the contention of learned Authorized Representative of the Department that it was obligatory for the Appellant to have enclosed all the "relied upon documents" contained in the earlier show cause notice dated 17 April, 2013, since the subsequent show cause notice dated 6 May, 2014 provided that all the charges and allegations mentioned in the show cause notice dated 17 April, 2013 shall mutantis-mutandis shall apply. The earlier show cause notice pointed out three discrepancies out of which only one was regarding non-payment of Service Tax on inc ..... 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