Custom, Excise & Service Tax Tribunal
M/S. Sadhana Educational & People ... vs Commissioner Of Central Excise, ... on 9 October, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. Appeal No. ST/254/2006-Mum. (Arising out of Order-in-Appeal No. P/III/097//06/2006 dated 14.6.2006 passed by the Commissioner (Appeals) Central Excise, Pune-III ) For approval and signature: Honble Mr. S.S. Kang, Vice President Honble Mr. P.K.Jain, Member (Technical) ============================================================
1. Whether Press Reporters may be allowed to see :
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 :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy :
of the Order?
4. Whether Order is to be circulated to the Departmental :
authorities?
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M/s. Sadhana Educational & People Development Services Ltd.
:
Appellant
VS
Commissioner of Central Excise, Pne-III
:
Respondent
Appearance
Shri J.C. Patel Advocate, for Appellant
Ms. D.M. Durando, Deputy Commissioner (A.R) for respondent
CORAM:
Mr. S.S. Kang, Vice President
Mr. P.K. Jain, Member (Technical)
Date of hearing : 09/10/2013
Date of decision :
ORDER NO.
Per : P.K. Jain
M/s. Sadhana Educational & People Development Services Ltd., appellant are conducting a two year course in Post Graduate Deploma in Management (PGDM) at their Sadhana Centre for Management & Leadership Development (SCMLD), Pune. Appellants are registered as a provider of service under Commercial Training & Coaching and accordingly paid Service Tax relating to said course during 2004-05. However, later on they filed refund claim amounting to Rs.8,56,522/- on the grounds that they were not liable to pay the said tax for period other than 1.7.2004 to 9.9.2004. The said claim was on the grounds that they are entitled to exemption under Notification No. 24/04-ST dated 10.9.2004, their course being Vocational Training. The said claim was rejected by the original authority Appellant filed appeal before Commissioner (Appeals), who also rejected their appeal. Appellant are before us against the said order.
2. Learned advocate for the appellant submitted that they are not disputing that they are providing Commercial Training & Coaching Service but their claim is that they are exempt from payment of service tax being vocational training. Ld. Advocate submitted that Notification No. 24/2004-ST dated 10.9.2004 exempts the taxable service provided in relation to commercial training or coaching by a vocational training institute. Explanation in the Notification provides that for the purpose of the said Notification, 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 self-employment, directly after such training or coaching. It follows from a plain reading of the said Notification that the exemption is granted to such commercial training or coaching centres which are imparting a vocational training or coaching and vocational training and coaching as per the Explanation in the Notification is one which imparts skills to enable the trainee to seek employment or self-employment, directly after such training or coaching. The question which arises is whether the Appellant is a vocational training or coaching centre and further whether the course conducted by the Appellant is such that it imparts skills to enable the trainee to seek employment or self-employment directly after such training.
2.1 Ld. Advocate further submitted to answer the question as to whether the Appellant is a vocational training or coaching centre, it is necessary to determine the scope of the terms Vocational and Vocation. A reference to any dictionary would show that the term vocational means pertaining or relating to or connected with a vocation or occupation and the term vocation means an occupation, business, profession or calling. Since the training provided by the Appellant pertains to Marketing, Finance, Human Resources Management, System Management and Manufacturing and Operations Management, it clearly is vocational since Marketing, Finance, Human Resources Management, Systems Management and Manufacturing and Operations Management are all occupations, business, profession or calling.
2.2. Ld. Advocate further submitted that the Honble Tribunal in the case of Ashu Export Promoters (P) Ltd. Vs. CST-2012 (25) STR 359 has examined the scope of the term Vocational and held that the term Vocational means relating to an occupation or employment. The Tribunal has further held that when engagement in occupation or employment becomes outcome of vocational training, the benefit of the exemption would be available to such training. The courses conducted by the assessee in that case were courses in Export-Import, Merchandising and Retail. The Tribunal rejected that vocational training would mean only training in skills like carpentry, smithy, making of gem and jewellery, etc. which are skills meant for people with relatively low levels of education. The Tribunal also rejected the contention of the Revenue that training imparted to a person with education up to 12th standard to train him for white collar jobs cannot be considered as vocational training.
2.3 Ld. Advocate argued that applying the principles/ratio laid down in the said judgment to the present case, it would clearly follow that the training imparted by the Appellant in the present case is Vocational training. The training imparted by the Appellant pertains to the occupation or business or profession of Marketing, Finance, Human Resource Management, System Management and Manufacturing and Operations Management and upon receiving such training the trainees have been recruited/employed by various corporate bodies/companies/banks/financial institutions.
2.4 Ld. Advocate further stated that it is evident from the course content that the training imparted by the Appellant is directed at imparting skills which would prepare them for taking up employment with various corporate bodies/companies/banks/ financial institutions or self-employment and Appellant has 100% record in respect of the Appellants trainees being recruited and given employment or taking up self-employment upon completion of the aforesaid course. According to Ld. Advocate there is thus no manner of doubt that the training imparted by the Appellant is vocational training which imparts skills which enable the trainee to seek employment or self-employment directly after such training.
2.5. Ld. Advocate further argued that the Honble Tribunal in the case of Prof. Ulhas Vs. Bapat Vs. CCE Order No.A/1710/13/CSTB/C-I dated 18.7.2013 has in paras 5.6 and 5.7 has held that the trades designated by the National Council for Vocational Training under the Apprentices Act would be a useful guide in determining whether the training in a particular subject/field can be considered as vocational training. The list of subjects/fields which are designated for vocational training as downloaded from the Website of Board of Practical Training (E.R.), Kolkatta was submitted at the hearing in which various subjects/fields under Business and Commerce are listed viz. Accountancy & Auditing, Banking, Basic Financial services, Business Math Statistics, Industrial Management, Marketing and Salesmanship, Office Management, etc. It is thus clear that the fields/subjects in which the Appellant is providing training are considered as vocational.
2.6 Ld. Advocate further stated the Tribunal has held that various courses such as BA in journalism, post graduate diploma courses in Print, television, online journalism, media management, business management, fashion technology, advertising, graphic design, media studies, Business, insurance and abacus training to teachers as vocational; as is evident from following case laws:
(i) IILM Film & Media School Vs. CST 2013 (5) TMI 27
(ii) Wigan & Leigh College (I) Ltd. Vs. Jt. CST 2007 (8) STR 475
(iii) WLC College India Ltd. Vs. CST 2012 (27) STR 377
(iv) Pasha Educational Training Inst Vs. CCE 2009 (14) STR 481
(v) K.K. Academy P. Ltd. Vs. CST 2011 (24) STR 702 In IILM Film & Media School Vs. CST 2013 (5) TMI 27, the Tribunal has also held that the exemption notification on true and fair construction merely requires that vocational coaching or training imparted must impart skills which enable the trainee to seek employment or undertake self-employment and it does not required establishment of the fact whether one or some or all of the students of the assessee institute have obtained employment or have pursued self-employment after conclusion of the course of instruction.
In Wigan & Leigh College (I) Ltd. Vs. Jt CST-2007 (8) STR 475, the Tribunal has further laid down that the Notification does not envisage registration of the institute with AICTE as Vocational Institute. In fact such requirement of registration was for the first time introduced with effect from 27.2.2010 by Notification No.3/2010-ST.
2.7. Ld. Advocate stated that in view of above position, the impugned order is required to be set aside.
3. Ld. A.R. on the other hand submitted that Larger Bench of the Tribunal in the case of M/s. Great Lakes Institute of Management Ltd. Vs. CST, Chennai reported in 2013-TIOL-1480-CESTAT-DEL-LB has already held that the taxable. service of commercial training or coaching occurs when any institute or establishment is engaged in the activity of imparting skill, knowledge or lessons on any subject or field (excluding sports), irrespective of whether such imparting of skill, knowledge or lessons is in respect of particular discipline or a broad spectrum of disciplines/academic areas; irrespective of the nomenclature or description of the institute or establishment, as a coaching or training centre or an educational institution; regardless of whether an institute or establishment is incorporated by or registered under any law; and irrespective of distinctions on the basis of curriculum, course content, teaching methodology, course duration or otherwise. Activities of imparting skills, knowledge, lessons on any subject or field or when provided by any entity, institution or establishment which is excluded by a specific and legislated exclusionary clause would alone be outside the fold of the taxable activity.
Ld. A.R. further argued this Tribunal in the case of Prof. Ulhas Vs. Bapat Vs. CCE Order No.A/1710/13/CSTB/C-I dated 18.7.2013 in Appeal No. ST/330/05-Mum. has held that course conducted in Spoken English which helps in getting job in Call Centres as not a Vocational Course. He further argued that in para 5.6. of the said order, it is clearly stated that Vocational Course are for the people who have passes 8th, 10th, or 12th standard and not for those who are already graduates. Ld. A.R. further argued that masters program in management is a two years board program in management and such a program can never be considered as Vocational Training. In fact, if appellants argument is to be accepted all graduation/post graduation or even Ph.D/Reasearch program and all professional courses will become Vocational Centre. Vocational courses are very different from professional or academic courses. Ld. A.R. stated that in view of this position, appeal should be dismissed.
4. We have considered the rival submissions and given considerable thought to the issue. At the outset, we note that appellant is accepting that they are providing Commercial Coaching and Training Service. The dispute is limited to whether appellants service is eligible for exemption under notification No.24/2004-ST dated 10.9.2004. Notification No. 24/2004-ST dated 10.9.2004 read as under:-
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 training or coaching that impart skills to enable the trainee to seek employment or undertake self-employment, directly after such training or coaching;
(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.
Above notification exempts taxable service provided in relation to commercial training or coaching by a vocational training institute. Further, explanation in the said notification explains that vocational training institute means commercial training or coaching centre which provides vocational training or coaching that imparts skills to enable the trainee to seek employment or undertake self-employment, directly after such training or coaching.
4.1 Ld. Advocate for the appellants have given lot of emphasis that graduates who were unemployed came to their institute underwent the two years course, and all the students on completion of course were employed by different organization or self employed and hence their course is vocational and institute Vocational Training Institute. We are unable to agree with this contention, 100% employment or self employment is not decisive factor to decide whether a course is vocational course and institute is vocational training institute . The explanation clearly states that a training or coaching should be vocational in nature and it should impart skills to seek employment or self-employment after such training. All professional degrees/courses helps in seeking employment but that does not make them vocational courses. For example, M.B.B.S. or M.D. or M.S. Course helps in seeking employment or self employment but these cannot be considered as Vocational Training. All Engineering Courses also helps in seeking employment but that does not make it vocational training. For example welding is a vocation but a post-graduate course is welding technology cannot be considered as vocational course.
5. We have gone through the content of the course, as submitted during arguments. It is seen the course is for a duration two years. The first year is common to all candidates. Thereafter they undergo summer training with some organization. In the second year, they undergo courses in one of the five disciplines/area of specialization viz. Financial Management, Human Resources, Management Manufacturing and operations Management, and Systems Management. The first year course has three Trimester The course content are as under,_ Trimester-I 21st June to 30th Sept.2005 Trimester-II 1st Oct.2005 -10th Jan 2006 Trimester-IIi 11th Jan- 25th April 2006 Research Methodology Marketing Management-II Logistic & Supply Chain Management Marketing Management-I Marketing Research Corporate Finance People Management Cost & Management Accounting Management Information System Manufacturing Management Project Management Corporate & Business Laws Financial Analysis Operations Management Quality Systems Management Advanced Data Analysis using MS Excel Commercial Laws Sales & Distribution Management Operation Research Techniques Psychology & Organizational Behaviour Performance Management System Applied Statistics Systems Management SPSS Applications Enterprise Management-Case Studies Enterprise Mgt.-Case Studies System Analysis and Design Micro Economics SPSS Theory & Practical Strategic Business Management Case Studies Business Communication Macro Economics Negotiation and Contacting Business Mathematics Advance Statistics Self Preparation Self Preparation Self Preparation Current Affair Analysis Current Affair Analysis Current Affair Analysis Student Specific Assignment Lib.
Student Specific Assignment- Field Student Specific Surveys - Field Community Work 20 hrs. Community Work 20 hrs. Community work 20 hrs. With Consumer, Market, Organisational or Social Research Assignments From the course content, it is clear that courses are academic in nature and covers broad spectrum of subjects as diverse as Micro Economic, Business Communication, Psychology & Organizational Behaviour, Commercial Laws, Computer based Data Analysis, Corporate Finance, Negotiation & Contracting. In the second year, courses through gets limited to the field of specialization but are again diverse theory oriented and academic in nature. The content of courses can by no stretch of imagination can be called vocational. No doubt the two years course will help candidates in understanding various facts of management and get employment. It is a professional management course. This cannot be considered as Vocational Course that imparts skill to enable the trainee to seek employment or self employment after the said course.
6. Ld. A.R. has quoted this Tribunals judgement in the case of Prof. Ulhas V. Bapat (supra) to explain what vocational courses are Ld. Advocate for the appellant argued that this judgment is in his favour as the Board of Practical Training (ER) Kolkata has listed various courses relating to Business & Commerce as Designated Trade for the Training of (10+2) Technician Vocational Apprentices under the apprentices (Amendment) Act, 1961. These courses include Accountancy and Auditing, Banking, Basic Financial Services etc. First of all, we note that the Apprentices Act, 1961 is for different purpose and does not limit to Vocational Training . It is also extends to graduates etc. Secondly, even the document produced by the ld. Advocate states that there are meant for 10+2 pass candidates. Thirdly, each designated trade is in narrow campus e.g. Accountancy & Auditing is one trade, Accountancy & Taxation other trade, Basic Financial Services other trade and so on. The fact that the level of course is meant for 10+2 level candidate while appellants course is for candidate who are already graduates, the two level are not same. In any case as elaborated in earlier paras the content of M.B.A. course is very wide. Just because few subjects (that also elementary level) of M.B.A. Course are different Designated Trades in the Apprentices Act does not make whole of M.B.A. Course as Vocational Course. We have also gone through the list of 70 trade in Engineering Discipline and 63 Trades in non-engineering discipline, referred in the Tribunals order in the case of Prof. Ulhas V. Bapat (supra). List relating to engineering and non-engineering disciplines are as under:
7. The nearest Trade is Human Resource Executive, Marketing Executive, Finance Executive. These trades are in very very narrow campus compared to M.B.A. Course being conducted by the appellant. Even the level as name Executive suggest is elementary. Under the circumstances, we do not consider that the course conducted by appellant can be considered as Vocational Course within the scope of Notification No. 24/2004-ST dated. 10.9.2004. Accordingly, we hold that service provided by the appellants are not eligible for the benefit of Notification No. 24/04-ST dated 10.9.2004.
8. Learned advocate for the appellant has quoted a catena of case laws listed earlier. We have gone through each of the cases. We find the facts of the present case are distinguishable as none of these cases cover a general M.B.A. program with content of the program as wide and academic as in the present case. We do not consider it necessary to discuss each of these case here.
9. We also note that Notification No. 24/2004-ST dated 10.9.2004 has been amended vide notification No. 3/2010-ST dated 27.2.2010, wherein the Explanation relating to Vocational Training Institute is replaced by new definition. As per new definition, Vocational Training Institute means as Industrial Training Institute or Industrial Training Centre officiated to the National Counsel for Vocational Training, offering courses is designated trades as notified under the apprentices Act, 1961 (52 of 1961). Though the said explanation was inserted in 2010, but indicates the scope of term vocational training in specific terms.
10. In the result, appeal is dismissed.
(Pronounced in court on .) (S.S. Kang) Vice President (P.K. Jain) Member (Technical) Sm ??
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