Custom, Excise & Service Tax Tribunal
Prof. Ulhas Vasant Bapat vs Commissioner Of Central Excise, ... on 18 August, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. I Appeal No. ST/330/05 (Arising out of Order-in-Appeal No. P-III/316/2005 dated 23.9.2005 passed by the Commissioner of Central Excise (Appeals), Pune-III). For approval and signature: Honble Shri P.R. Chandrasekharan, Member (Technical) Honble Shri Anil Choudhary, Member (Judicial) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy : Seen of the order? 4. Whether order is to be circulated to the Departmental : Yes authorities? ====================================================== Prof. Ulhas Vasant Bapat Appellant Vs. Commissioner of Central Excise, Pune-III Respondent Appearance: Shri A.S. Kulkarni, Advocate for Appellant Mrs. D.M. Durando, Dy. Commissioner (AR) for Respondent CORAM: SHRI P.R. CHANDRASEKHARAN, MEMBER (TECHNICAL) SHRI ANIL CHOUDHARY, MEMBER (JUDICIAL) Date of Hearing: 18.07.2013 Date of Decision: .2013 ORDER NO. Per: P.R. Chandrasekharan
The appeal is directed against Order-in-Appeal No. P-III/316/2005 dated 23.9.2005 passed by the Commissioner of Central Excise (Appeals), Pune-III.
2. The appellant, Prof. Ulhas V. Bapat (Prof. Bapats Academy of English & Speech Communication, Pune) got registered with the department under the category of Commercial Coaching & Training Services. He paid Service Tax amounting to Rs.1,40,180/- during the period 21.1.2004 to 18.10.2004. Subsequently, he filed a refund claim dated 16.11.2004 on the ground that Coaching in Spoken English comes under the category of Coaching in Foreign Languages and is exempted from Service Tax vide Notification No. 9/2003-ST dated 20.6.2003. The said refund claim was considered by the jurisdictional Assistant Commissioner, who observed that as per Article 343 of the Indian Constitution, English is an official language and, therefore, it does not come under the category of foreign languages. Therefore, he held that coaching in English does not come under the category of Vocational Training and, therefore, the benefit of Notification No. 9/2003-ST will not apply. Accordingly, he rejected the refund application. Aggrieved of the said order, the appellant preferred an appeal before the lower appellate authority. The lower appellate authority after considering the submissions made, held that training and coaching given for spoken English is not vocational training and, therefore, the benefit of Notification No. 9/2003-ST would not apply. Accordingly, the appeal was rejected. Aggrieved of the same, the appellant is before us.
3. Learned Counsel for the appellant makes the following submissions: -
(i) It is his contention that English is a foreign language and as per Circular No. 50/8/2003-ST dated 20.6.2003, it has been clarified that foreign languages institutes would not be liable to Service Tax under Notification No. 9/2003-ST dated 20.6.2003.
(ii) It is further submitted that a faculty of the appellant firm M/s Amol Bapat had conducted a One-day International English Workshop at the Infosys BPO Phase 2 at Hinjewadi, Pune, as part of the Corporate Training Services conducted by the British Council and from the letter issued by the British Council, it can be seen that the said workshop was useful to BPO firms in the field of Information Technology.
(iii) The appellant has produced letters from a few persons, who had undergone the training in Spoken English at the appellants coaching centre and they have certified that it has improved their employability.
(iv) The appellant has also produced a letter from Retired Professor Shridhar B. Gokhle, wherein he has certified that the course conducted by the appellant is directly related to employability of the student.
(v) Reliance is placed on the advertisement issued by the appellant, wherein it has been specifically stated that the course is for English in Call Centers.
In the light of the above, it is contended that the appellant is eligible for the benefit of Notification No. 9/2003-ST. Reliance has also been placed on the decisions of this Tribunal in the case of ICM English Centre Vs. Commissioner of Service Tax, Bangalore 2012 (26) STR 157 (Tri-Bang). In the light of this, it is the appellants contention that they are rightly entitled for the benefit of Notification No. 9/2003-ST.
4. Learned Dy. Commissioner (AR) appearing for the Revenue, on the other hand, reiterates the findings of the lower authorities and submits that the appellant is not eligible for the benefit of Notification No. 9/2003-ST.
5. We have carefully considered the submissions made by both the sides.
5.1 Notification No. 9/2003-ST dated 20.6.2003 reads as follows: -
In exercise of the powers conferred by 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;
b. a computer training institute; or c. a recreational training institute;
to any person, from the whole of the service tax leviable thereon under sub-section (2) of 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 coaching or training that impart skills to enable the trainee to seek employment or undertake self-employment, directly after such training or coaching;
ii. "computer training institute" means a commercial training or coaching centre which provides coaching or training relating to computer software or hardware;
iii. "recreational training institute" means a commercial training or coaching centre which provides coaching or training relating to recreational activities such as dance, singing, martial arts, hobbies.
2. This notification shall come into force on the 1st day of July, 2003 and shall remain in force upto and inclusive of the 29th day of February, 2004. This notification was succeeded by Notification No. 24/2004-ST dated 10.9.2004, which also extended the exemption to taxable services provided in relation to Commercial Coaching or Training by a Vocational Training Institute.
5.2 From the Notification cited above, it is clear that the exemption is on the service provided in relation to commercial training or coaching by a Vocational Training Institute. It is not in dispute that the appellant is rendering commercial training or coaching service. The only claim is that since English is a foreign language, the service rendered by the appellant should be treated as a Vocational Training as per the definition of Vocational Training given in the above notification. The training should be such that it impart skills to enable the trainee to seek employment or undertake self employment directly after such training or coaching. The course conducted by the appellant is a two weeks course and as per the advertisement the said course enables the trainee to improve the pronunciation, accent, presentation skills, writing skills, telephone etiquette, group discussion training, interview techniques and so on. After undergoing this training for a period of two weeks, it is not understood had it can, in any way, improve the self employability of the trainee. Therefore, the only question that is left is whether the said training enables the trainees to seek employment after such training or coaching.
5.3 The various certificates submitted by the appellant have been given by people who are already employed and they have merely certified that the training has increased their employability in future. Similarly, the certificate issued by the retired Professor merely states that the training imparted is directly related to employability of students. These certificates have been obtained very recently and, therefore, the evidentiary value of these certificates is suspect. The certificates produced are not from any employers who have found that the training imparts skills making the trainees suitable for employment in their firms.
5.4 The reliance placed on this Tribunals decision in the case of ICM English Centre (supra) also does not help as the view taken in the said case was a prima facie view at the time of considering grant of stay and, therefore, there is no precedential value for the said decision.
5.5 In the present case, the appellant is conducting the training in spoken English for a duration of only two weeks as can be seen from their advertisements. When even after undergoing training in English languages for years together both in school and colleges, it is difficult to attain proficiency, it is inconceivable that in a matter of two weeks, any proficiency or skill can be imparted or achieved by undergoing training for a mere two weeks. Thus, the whole claim of the appellant lacks credibility and conviction.
5.6 The apex body which deals with vocational training in India is the National Council for Vocational Training, which comes under the Ministry of Labour and Employment, Director General of Employment and Training. The said body has specified various trades which are considered for vocational training. The trades are broadly divided into two categories Engineering Trade and Non-Engineering Trade. There are 79 trades specified in Engineering category for vocational training. Similarly, in respect of Non-Engineering Trades, 62 areas have been identified for vocational training. Minimum educational qualifications have been prescribed for undergoing the training apart from duration of the training itself. The qualifications prescribed are either 8th pass, 10th pass or 12th pass and duration of the training ranges from 6 months to 2 years. Training in Languages, whether Indian or foreign, has not been prescribed as a vocational training in the list published vide Notification No. DGE&T-19(4)/2011-CD-Pt dated 19.6.2013 issued by the Govt. of India in this regard.
5.7 Thus, if the apex body dealing with vocational training in India itself does not consider training in languages as vocational training, it is not conceivable had training in languages can be treated as a vocational training for the purpose of Notification No. 9/2003-ST or its successor Notification No. 24/2004. The classification issued by the Board also would not matter as the taxability is determined not by the Circulars or Notifications, but by the provisions of law. It is an accepted principle of statutory interpretation that the notification has to be interpreted strictly since it is in the nature of an exception. The Hon'ble Apex Court in the case of Union of India Vs. Wood Papers Ltd. 1991 AIR 2049 held as follows: -
When the question is whether a subject falls in the Notification or in the exemption clause then it being in nature of exception is to be construed strictly and against the subject but once ambiguity or doubt about applicability is removed and the subject falls in the notification then full play should be given to t and it calls for a wider and liberal construction. If this principle is applied to the facts of the present case, it can be seen that the appellant is not eligible for the benefit of Notification No. 9/2003-ST or its successor Notification No. 24/2004-ST.
6. In view of the above, we do not find any merit in this appeal. Accordingly, we dismiss the same.
(Pronounced in Court on )
(Anil Choudhary) (P.R. Chandrasekharan)
Member (Judicial) Member (Technical)
Sinha
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