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TMI Blog2024 (10) TMI 680X X X X Extracts X X X X X X X X Extracts X X X X ..... other customers in USA. The customers in USA placed the same on websites allowing the users to access and retrieve data. Therefore, the services rendered by the appellant to M/s. Focus Care Inc, USA cannot fall within the scope of Online Information and Database Access or Retrieval Service . Consequently, it is an export of service since the recipient of the service is located in USA in view of the Rule 3 of the POPS Rules, 2012 read with Rule 6A of the Service Tax Rules, 1994. Similarly, also in the case of supply of tutors for online tutoring to M/s. Advance Tech Enterprises, UAE, the appellant merely provided tutors to M/s. Advance Tech Enterprises, UAE and the web platform is not hosted by the appellant and also does not belong to the appellant. The appellant also does not provide any access to the web platform which is provided by M/s. Advance Tech Enterprises to its students. It is not an automated web-based services which are completely automated and required minimum human intervention; but the online tutoring provided to M/s. Advance Tech Enterprises, UAE involves interaction between the tutors and the students. In view of the judgment of the Tribunal in the case of M/S DEW ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the relevant period. On the basis of scrutiny of their ST-3 returns by the Anti-Evasion wing of the Department, it was noticed that the appellant had been filing NIL ST-3 returns and not paid service tax. Consequently, their balance sheet and P L account for the period 2013-14 to 2017-18 and other relevant documents have been called for and an investigation was initiated by recording statements of Shri Bhawani Singh Shekhawat, Finance Manager. On completion of the investigation, show-cause notice was issued to them on 08.04.2019 for recovery of service tax amounting to Rs.9,96,07,280/- not paid during the period 01.10.2013 to 30.06.2017 with interest and penalty. On adjudication, the demand was reduced to Rs.8,90,70,549/- with interest and penalty. Hence the present appeal. 3.1. Learned advocate for the appellant, narrating the issues involved and the activities undertaken by the appellant, has submitted as follows: a) They had undertaken development and export of E-Learning Courses to Focus Care Inc of USA and consideration for export of such E-learning courses was received in foreign Exchange. Development of E-learning courses involve analysis, designing, scripting and testing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1994. The Appellant accordingly did not pay service tax in respect thereof. He has also submitted that since the trading activity of sale of fabrics is not a service, question of payment of service tax in respect thereof does not arise. 3.3. Elaborating his argument, he has submitted that it is evident from the Appellant s Invoice on Focus Care Inc, USA and the corresponding Softex Form that the Appellant had exported E-learning Course content and since the consideration for the same was received in foreign exchange and since the place of provision of service as per Rule 3 of the Place of Provision of Service Rules 2012(POPS Rules, 2012 for short), is the location of the service recipient, which is USA, the same constitutes export of service under Rule 6A of the Service Tax Rules, 1994 and hence no service tax is payable thereon. 3.4. Assailing the finding of the Principal Commissioner that the said service is of Online Information and database access retrieval , for which the place of provision of service, under Rule 9(b) of the Place of Provision of Services Rules 2012, is location of the service provider (India), it is submitted that the same is ex-facie erroneous as held by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss or retrieval services. Since the Appellant has not provided online information and database access or retrieval services, Rule 9 (b) of the Place of Provision of Service Rules 2012 does not apply to them and hence the place of provision of service is not in India, accordingly, as per Rule 3 of the Place of Provision of Service Rules 2012, the place of provision of the service is the location of the recipient i.e. USA. Consequently, the same constitutes export of service under Rule 6A of the Service Tax Rules 1994 and hence no service tax was payable in respect of the same. 3.7. It is submitted that the Appellant provided Tutors to Advance Tech Enterprises, UAE, for online tutoring on the Online Tutoring Platform of Advance Tech Enterprises, UAE. It is submitted that Online Tutoring , being interactive teaching conducted by the Tutors, cannot and does not amount to Online Information and database access retrieval . As clarified in Para 5.9.5 of CBEC Education Guide, Online Information and database access retrieval service covers online automated web- based services, which are completely automated and require minimal human intervention, whereby a subscriber of the service can have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... project. 3.10. It is submitted that the Principal Commissioner has in Para 64 of the Order-in-Original, proceeded on the basis that the Appellant cannot be considered to be a State Government Agency referred to in the said CBEC Circular and that the Appellant is a private Agency. The said approach of the Principal Commissioner is totally erroneous and misconceived, since the Appellant is implementing the said Scheme on behalf of the State Government and reference to State Agencies in the said Circular is clearly reference to project implementing agencies who implement the State s programme. The Principal Commissioner seriously erred in ignoring in this behalf, the decision of the Tribunal in the case of Centre for Research Industrial Staff Performance v CGST CCE- [2019 (22)GSTL 385] in which the said Circular was held to be applicable to a private party who was implementing the Program/ Project. 3.11. Without prejudice to the aforesaid submissions, in any event, it is submitted that the vocational education and training imparted by the Appellant under the said Sant Shiromani Ravidas High Skill Development programme, was an approved vocational education course as defined in Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also contrary to letter dated 9th February 2016 of Government of India, Ministry of Skill Development Entrepreneurship forwarding certificates issued by NCVT in Modular Employable Course to candidates trained by the Appellant. 3.17. The Show Cause Notice itself in Para 2 (b) states that it is seen from the Balance Sheet and P L Accounts that the Appellant is involved in Sale of Fabrics. The Show Cause Notice thereafter in Para 7 goes on to list Sale of Fabrics as one of the Services provided by the Appellant. 3.18. It is submitted that it is ex-facie erroneous to treat the income which is reflected in the books of account as being from Sale of Fabrics , to have been received towards Service provided by the Appellant and to demand service tax thereon, without there being any evidence of any service rendered by the Appellant. No service has been identified in the Show Cause Notice as having been provided by the Appellant for the income which was received from Sale of fabrics nor is there any evidence of any such service provided by the Appellant. Further, no service recipient has been identified and there is no evidence to show that income received from Sale of fabrics, was in fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding the said Purchase and Sales Invoices and Chartered Accountant s Certificate, the Principal Commissioner has given a factually incorrect finding that the Appellant has not produced tangible evidence/ documents of Purchase and Sale of Fabrics. 3.24. The decisions relied upon by the Commissioner in Para 83 of the Order-in-Original holding that burden lies on the person claiming the benefit of an exemption Notification, have no application to the present case, since the Appellant is not claiming benefit of any Notification granting exemption from Service tax. It is the department who is seeking to levy Service tax by asserting/alleging that the amounts received on Sale of goods were on account of rendering of Service and liable to service tax. Therefore, the burden is on the department to prove by evidence that the transactions were not of sale of goods, but were of rendering of service. There is no such evidence produced by the department. The department has not produced any evidence to show what was the nature of service and to whom it was rendered. There is no inquiry from the person/entity from whom the said income/ consideration was received by the Appellant and there is noth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and facts has confirmed the demand, his findings in Para 62 to 66 in the OIO are reiterated. b. With respect to the appellants contention that the issue is covered by the decision of the Hon ble Tribunal in the case of Centre for Research Industrial Staff Performance v CGST [2019 (22) GSTL 385], it is submitted the relevant case law dealt with situation wherein consideration received in the form of Grant -in - Aid from the Central Government relating to activity with regard to special project Swarnajyanthi Gram Swarojgar yojana, a central government sponsored scheme with state government, was not liable to Service Tax. The Ratio decidendi of the above case cannot be squarely applied to the present case as the issue involved in the present case is with respect to Vocational Training Provided by a Private Agency and the appellant has nowhere produced documentary evidence in respect of Grants in Aid received as consideration, neither in the reply to SCN nor before the adjudicating authority. He has not taken the plea during the proceedings before lower authorities regarding this. The appellant s reliance in the case of Centre for Research Industrial Staff Performance v CGST (supra) is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of e-learning course content for M/s. Focus Care Inc, USA and exported the same on consideration. The process of development e-learning contents involved analysis of the learning content, objective of learning, audience to be targeted, method of delivery and presentation; designing of the learning content i.e. deciding how the content will be broken down; scripting and developing the e-content by missing of texts, audio, video, animations, references etc. and testing the e- content to find out spelling mistakes, content errors, clarity of pictures etc. The said e-learning content developed and exported by the appellant to USA, who in turn supplied and sold to the clients in USA, who host the same on their learning platform i.e. Learning Management System. Invoices were raised by the appellant on M/s. Focus Care Inc. The Appellant s claim is that the recipient is located in USA and the payment if received in convertible foreign exchange and as per Rule 3 of POPS Rules, 2012, since the location of recipient is in USA, it constitutes export of service under Rule 6A of the Service Tax Rules, 1994. Similarly, in the case of service provided to M/s. Advance Tech Enterprises, UAE, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eval or both, in electronic form through computer network, in any manner. Thus, these services are essentially delivered over the internet or an electronic network which relies on the internet or similar network for their provision. The other important feature of these services is that they are completely automated, and require minimal human intervention. Examples of such services are:- i) online information generated automatically by software from specific data input by the customer, such as web-based services providing trade statistics, legal and financial data, matrimonial services, social networking sites; ii) digitized content of books and other electronic publications, subscription of online newspapers and journals, online news, flight information and weather reports; iii) Web-based services providing access or download of digital content. The following services will not be treated as online information and database access or retrieval services :- i) Sale or purchase of goods, articles etc over the internet; ii) Telecommunication services provided over the internet, including fax, telephony, audio conferencing, and videoconferencing; iii) A service which is rendered over the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the web platform is not hosted by the appellant and also does not belong to the appellant. The appellant also does not provide any access to the web platform which is provided by M/s. Advance Tech Enterprises to its students. It is not an automated web-based services which are completely automated and required minimum human intervention; but the online tutoring provided to M/s. Advance Tech Enterprises, UAE involves interaction between the tutors and the students. Therefore, in view of the judgment of the Tribunal in the case of Dewsoft Overseas Pvt. Ltd .(supra), the said service cannot be considered as Online Information and Database Access or Retrieval Service . The Tribunal has observed as follows:- 4.4 The activity of providing online computer courses is not simply providing online access to data or information. What is being provided to the clients is online lessons on various topics in computer hardware and software and besides this, the clients are also provided the facility of online interactive chat with other students, faculty and external experts and the clients can also give online test. Thus the essential character of service being provided is online training or co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the scope of said services and the judgment delivered in the case of Dewsoft Overseas Pvt. Ltd . (supra) is not applicable. It is noticed that under Sl.No.16(5), it is clarified as follows:- Sl.No.16(5) Supply of distance teaching. (a) Automated distance teaching dependent on the internet or similar electronic network to function and the supply of which requires limited or no human intervention, including virtual classrooms, except where the internet or similar electronic network is used as a tool simply for communication between the teacher and student. (b) Workbooks completed by pupils online and marked automatically, without human intervention. 13. A simple reading of the same, it is clear that it mentions automated teaching dependent on the internet which does not require human intervention or limited intervention including virtual class rooms; therefore the argument of the learned AR for the Revenue that the principle laid down in the case of Dewsoft Overseas Pvt. Ltd. (supra) is not applicable is not correct. 14. Now coming to the second issue regarding applicability of service tax on providing training under the Sant Shiromani Ramdas High Skill Development Programme by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng. Answering the said finding in the impugned order, the appellant referred to the website https://msde.gov.in/en/about-msde in submitting that the Director General of Training through which the Ministry executes skill development scheme; therefore the observation of the Commissioner that skill development scheme is not connected with NCVT / MES is incorrect which is also evident from the Publication of the Government of Gujarat under Skill Development Initiative Scheme under which training is given in Modular Employable Skill (MES) leading to certification by NCVT. Thus, the finding of the Commissioner is contradictory of the publication of the Government of Gujarat; hence cannot be sustained. 16. On the third issue regarding leviability of service tax on other receipts , we find that the appellant has claimed that the amount entered into in their P L Account relates to sale of fabrics, a trading activity; hence not connected with the services rendered by them. This fact has been disclosed by the Finance Manager Mr. Bhawani Singh Shekhawat of the appellant in his statement on 21.02.2009 recorded by the Department as a part of the investigation. Also, subsequently during the cours ..... X X X X Extracts X X X X X X X X Extracts X X X X
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