Custom, Excise & Service Tax Tribunal
Commissioner Of Customs, Central ... vs M/S Mfl Net Services Pvt. Ltd on 30 January, 2018
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Division Bench Court I Appeal No. ST/573 & 574/2008 (Arising out of Order-in-Appeal No. 36 & 37/2008 (H-II) S. Tax dated 11.08.2008 passed by Commissioner of Customs, Central Excise and Service Tax, (Appeals-II), Hyderabad) Commissioner of Customs, Central Excise and Service Tax, Hyderabad-II ..Appellant(s) Vs. M/s MFL Net Services Pvt. Ltd., ..Respondent(s)
Appearance Shri Arun Kumar, Deputy Commissioner (AR) for the Appellant.
Shri B. Venugopal, Advocate for the Respondent.
Coram:
Honble Mr. M.V. RAVINDRAN, MEMBER (JUDICIAL) Honble Mr. MADHU MOHAN DAMODHAR, MEMBER (TECHNICAL) Date of Hearing: 30/01/2018 Date of Decision: 30/01/2018 FINAL ORDER No. A/30132-30133/2018 [Order per: M.V. Ravindran] These two appeals are filed by the Revenue against Orders-in-Appeal No. 36 & 37/2008 (H-II) S. Tax dated 11.08.2008.
2. Heard both sides and perused the records.
3. On perusal of records, it transpires that the issue is regarding Coaching and Training services for the period July, 2003 to September, 2007. The Adjudicating Authority in the show cause notice alleged that the respondents were conducting of commercial training or coaching to the students, after passing the training were accepted as recognized by the Insurance Regulatory Development Authority (IRDA), who permitted them to function as Insurance Agents; is not certificate recognized by any law. The Adjudicating Authority after following due process of law, confirmed the demands raised along with interest and also imposed penalties. Aggrieved by such an order, the appeals are preferred before the First Appellate Authority, who set aside the Orders-in-Original holding that respondent under not to be taxed under the category of Commercial Coaching and Training Services.
4. The issue involved in this case is whether giving certificate to the students by the respondents institute which enabled the said students function as Insurance Agents is taxable or otherwise needs to be looked into from the angle that these certificates are recognized by IRDA. Similar matter has been decided by this Bench in the case of Pasha Educational Training Inst. [2009 (14) STR 481]. We reproduce the ratio which is contained in paragraph 7 to 10:
7.?We have gone through the records of the case carefully. Both the lower authorities have held that the services rendered by the appellants could be categorized as Commercial Training or Coaching. However, they have also given a finding that the said coaching or training rendered by the appellant cannot be called as vocational training and therefore the benefit of exemption Notification 9/2003 dated 20-6-2003 as amended cannot be extended to the said training imparted by the appellant. There is also a finding by the Original Authority that the appellant would not be entitled for exemption under Notification No. 10/2003, dated 20-6-2003 which provides exemption for institute giving the course which leads to the award of certificate or diploma or degree recognized by law. The finding given is that after the course is completed the institute gives a certificate and the said certificate cannot be considered as a degree or diploma. The so called certificate issued by them is at the most makes the candidate eligible for writing the examination conducted by IRDA. The lower authority has justified the extended period. He has given a finding that the appellants are duty bound to approach the department and take registration once their service comes into tax net.
8.?The Commissioner (Appeals) has stated that the appellants are imparting coaching in Insurance Business to candidates sponsored by various Insurance companies and collecting substantial amounts as fees from these companies. No evidence had been produced by the appellants to prove that the institute is really working on charitable basis except stating that they are exempted from Income Tax Act. In para 9 of the impugned order the Commissioner has stated that after completion of the course the trainees are not employed directly or capable of getting self employment in view of the fact that the trainees should again write examination conducted by IRDA to qualify to work as Insurance Agent in terms of Section 64UM of the Insurance Act, 1938. Moreover, the appellant is not issuing any certificate like diploma or degree and except issuing 100 hours attendance certificate in a letter to the sponsoring insurance companies which enable the candidates to appear for examination. He has also given a finding that the appellant is not entitled for the exemption which is available only to those institutes, which offer coaching or training which forms part of the course or curriculum of any other institute leading to issuance of any certificate recognized by law. He has also justified the invocation of the extended period on the ground that the appellants never approached the authorities for exemption and the issue came into the light only when the department started investigation.
9.?The appellant is providing training to candidates sponsored by various Insurance companies. We have gone through the syllabus of the training given by the appellant. The broad topics covered are :
(a) Introduction to insurance
(b) Fundamental of Agency Law
(c) Legislative and regulatory matter
(d) Procedure for becoming an agent and code of conduct
(e) Functions of the agents
(f) Company profile
(g) Principles of Life Insurance
(h) Financial planning and taxation
(i) Insurance salesmanship
(j) Computation of premium, bonus
(k) Insurance document
(l) Life insurance product
(m) Options guarantees and riders
(n) Group insurance pension plan
(o) Health related insurance
(p) Obligations of insurer to rural/social sector claim
(q) Agency commission structure
(r) Personal development
(s) Behavioral aspect.
10.?A perusal of the syllabus shows that the appellant imparts very comprehensive training for insurance agents. There is also an approval of the institute by the Insurance Regulatory and Development Authority. On going through the nature of the training, it is clear that the said training can be considered as Commercial Training or Coaching because the Institute imparts skill or knowledge on the subject of insurance. However, the second point to be noted is whether the said training can be considered as a vocational training. Vocational training means training that imparts skills to enable the trainee to seek employment or undertake self employment directly after such training or coaching. This definition should not be interpreted in a very narrow sense as done by the Commissioner (Appeals). The argument of the Commissioner (Appeals) is that even after the training, the trainees should again write examination conducted by IRDA to qualify to work as Insurance Agent under the Insurance Act, 1938. We should not forget that the comprehensive training given by the appellant enables the trainees to appear for the examination conducted by IRDA. Moreover, the appellant institute is also recognized for imparting training by the IRDA. In these circumstances, we cannot say that the training imparted is not a vocational training. We are of the view that the training imparted should be considered to be a vocational training. Once, it is held that the appellant imparts vocational training, then they would be entitled for the benefit of exemption Notification 9/2003-S.T. as amended. We also do not find any justification for invocation of the longer period. In these circumstances, we allow the appeal of the appellants with consequential relief.
Since an identical issue is already decided by this Bench, we find no reason to deviate from such a view already taken. Accordingly, the impugned orders are upheld and the appeals are rejected.
(Order dictated & pronounced in open court)
MADHU MOHAN DAMODHAR M.V. RAVINDRAN
MEMBER (TECHNICAL) MEMBER (JUDICIAL)
Lakshmi.
Appeal No. ST/573 & 574/2008
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