Custom, Excise & Service Tax Tribunal
M/S. Maria Computer Systems (P) Ltd vs C.C.E., Bhopal on 22 December, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
West Block No. 2, R.K. Puram, New Delhi 110 066
Date of Hearing: 02.11.2016
Date of Pronouncement : _22/12/2016__
For Approval & Signature of:
Honble Mrs. Archana Wadhwa, Member (Judicial)
Honble Mr. V. Padmanabhan, Member (Technical)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3.
Whether Lordships wish to see the fair copy of the order?
Seen
4.
Whether order is to be circulated to the Department Authorities?
Yes
Appeal No.ST/850/2010-CU[DB]
[Arising out of Order-in-Appeal No.32/BPL/2009, dated 24.03.2010 passed by the C.C.E.(Appeals), Bhopal-II]
M/s. Maria Computer Systems (P) Ltd. Appellant
Vs.
C.C.E., Bhopal Respondent
Appearance Mr. Sandeep Mukherjee, CA - For the appellant Mr. Sanjay Jain, DR - For the respondent CORAM: Honble Mrs. Archana Wadhwa, Member (Judicial) Honble Mr. V. Padmanabhan, Member (Technical) Final Order No._56035/2016___, dated _22/12/2016__ Per Mr. V. Padmanabhan :
The present appeal has been filed against the Order-in-Appeal dated 24.03.2010 passed by Commissioner (Appeals), Bhopal. The appellant is providing coaching in English language for which they are charging and collecting fees from the students. Revenue took the view that the service tax is liable to be paid on such consideration received under the category of Commercial Training and Coaching Services under Section 65(105)(zzc) of the Finance Act, 1994. The appellants claim for benefit of exemption from service tax under Notification No.24/2004-ST, dated 10.09.2004 was denied by the original authority as well as the first appellate authority. The appellant submits that the appellant will be entitled to the benefit of Notification for the reason that the trainings imparted is in the nature of vocational training or coaching, which is covered under the said exemption Notification.
2. Heard Shri Sandeep Mukherjee, ld. consultant for the appellant and Shri Sanjay Jain, ld. Departmental Representative for Revenue.
3. Ld. consultant for the appellant submitted that the CBEC has clarified vide circular No.59/8/2003-ST, dated 20.06.2003 that the Notification No.9/2003-ST, dated 20.06.2003 (which was succeeded by Notification No.24/2004-ST, dated 10.09.2004) has been issued to extend the benefit of exemption to various types of commercial coaching services. The illustrative list of services include Foreign Language Institute. Their submission is that giving coaching in English language will be covered in this category, since English is a foreign language. They have placed reliance on the Tribunals decision in the case of Darshan English Classes Vs. CCEST, Rajkot [2015 (39) STR 167 (Tri.-Ahmd.)], wherein the benefits stand extended for coaching classes in English language.
3. Ld. Departmental Representative, on the other hand, supported the order passed by the authorities below. His submission is that English being official language of the Govt. cannot be brought under the category of foreign language. Consequently, imparting coaching in English language cannot be extended the benefit of exemption under the said Notification. He also took support of the Tribunals decision in the case of Ulhas Vasant Bapat Vs. CCE, Pune-III [2015 (37) STR 1034 (Tri.- Mum.)]. In the said decision, benefit of exemption stands rejected for spoken English classes.
4. The service of commercial coaching and training services are covered in the statute for payment of service tax. However, vide Notification No.9/2003-ST, dated 20.06.2003 as well as by the succeeding Notification No.24/2004-ST, dated 10.09.2004, exemption has been granted as follows:-
In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable services provided in relation to commercial training or coaching, by, -
(a) a vocational training institute; or
(b) a recreational training institute, to any person, from the whole of the service tax leviable thereon under section 66 of the said Act.
Explanation.- For the purposes of this notification,-
(i) "vocational training institute" means a commercial training or coaching centre which provides vocational training or coaching that impart skills to enable the trainee to seek employment or undertake self-employment, directly after such training or coaching;
(ii)
(ii) "recreational training institute" means a commercial training or coaching centre which provides training or coaching relating to recreational activities such as dance, singing, martial arts or hobbies. In the Explanation to the Notification, the term Vocational Training Institute has been defined as one which provides vocational training, which will enable the trainee to seek employment or undertake self-employment directly after such training or coaching. It is common knowledge that acquiring skills in English language definitely improves better chance to seek employment. In this view of things, it is possible to say that the services rendered by the appellant could be covered by the Notification. However, the discussions in the impugned order centred around the circular dated 20.06.2003, which was issued to clarify the scope of the above exemption. Imparting training in foreign language has been cited as example of a vocational training institute. However, the whole discussion in the impugned order revolves around the question whether English is a foreign language or an official language in India. Without attempting to decide the question, which was triggered by the circular rather than by the statute or the Notifications, we find that the benefit of exemption for coaching in English language stands extended by the Tribunal in some of the cases cited by appellant. But there is also a contra decision of the Tribunal, wherein the benefit stands rejected for English language classes. In this connection, we find that the Notification No.24/2004-ST has been further amended vide Notification No.03/2010-ST, dated 27.02.2010 in which the term vocational training institute has been taken to mean industrial training institute of an industrial training centre affiliated to National Council for Vocational Training. The contra decision has been delivered in the context of the amended provisions of the Notification. It has been held by the Tribunal in the case of Actor Prepares Vs.CST, Mumbai [2014 (33) STR 546 (Tri.-Mumb,)] that the above amendment made in Notification No.24/2004-ST cannot be taken with retrospective effect. The demand in the present case covers the period from April, 2005 to March, 2008 and is prior to the date of amendment, i.e., 27.02.2010. As such, the amendment can have no effect for the period of demand.
5. In line with the above discussion, we set aside the impugned order and allow the appeal with consequential relief, if any to the appellant.
[Pronounced in the Open Court on_22/12/2016_] (Archana Wadhwa) Member (Judicial) (V. Padmanabhan) Member (Technical) SSK -2- -2-