ST – Definition of 'Vocational Training' in Notfn 3/2010 cannot be applied retrospectively - It is impermissible for any authority to enforce provisions to interpret Act by resorting to assumptions - Adjudication order is fallacious, hence quashed: CESTAT
By TIOL News Service
MUMBAI, JULY 31, 2013: THE assessee provides commercial training or coaching and administers a school for individuals who wish to pursue a career as actor-performers in the entertainment industry. The assessee conducts full time professional courses for stipulated durations providing intensive specialized training in acting to the students.
When proceedings were initiated against the assessee for failure to obtain registration; for filing returns for the period April, 2005 to March, 2010 and remitting service tax of Rs.62,63,012/- on the income received, the respondent claimed exemption from payment of service tax under Notification No.24/2004-ST dated 10/09/2004.
The adjudicating authority passed an O-in-O on 30/04/2012 rejecting the assessee's claim for exemption by concluding that in view of the subsequent Notification No.3/2010-ST dated 27/02/2010, the assessee was disentitled to exemption and is liable to remit tax on the amounts received towards conducting the courses. The adjudicating authority also concluded that since the assessee was not a “vocational training institute” within the meaning of said expression as defined in the subsequent Notification No.3/10-ST, the benefit of exemption was unavailable.
The appellant is before the CESTAT against this order passed by the Commissioner of Service Tax, Mumbai. There was nothing much to prepare or act for the facts spoke for themselves.
The CESTAT noted that it is not disputed that the assessee is a commercial training and coaching centre.
The Bench also observed that Notification No.24/2004-ST dated 10/09/2004 was issued by the Central Government under Section 93 of the Finance Act, 1994, (the Act) exempting taxable services provided in relation to “commercial training or coaching”, inter-alia , by a vocational training institute to any other person, from the whole of service tax leviable under Section 66 of the Act and this notification defined the expression “vocational training institute” as meaning a commercial training or coaching centre imparting skills to enable a trainee to seek employment or undertake self-employment directly after such training or coaching.
The Bench further noted that by a subsequent amendment vide Notification No.3/2010-ST dated 27/02/2010, “vocational training institute” was re-defined to mean an Industrial Training Institute or an Industrial Training Centre affiliated to the National Council for Vocational Training, offering courses in designated trades as notified under the Apprentices Act, 1961 and it was this definition that the adjudicating authority had applied to hold that the appellant was not entitled for the exemption under notification 24/2004-ST.
The CESTAT concluded –
“6.… In this view of the matter, exemption Notification No.3/2010-ST dated 27/02/2010 can only have prospective effect and cannot alter the definition of the expression “vocational training institute” retrospectively. Vocational Training Institute as defined by Notification No.24/2004 dated 10/09/2004 contains no such restrictive definition which requires affiliation to National Council for Vocational Training or the requirement of offering courses in designated trades as notified under the Apprentices Act, 1961, by an Industrial Training Institute or an Industrial Training Centre. It is impermissible for an authority conferred with the power to enforce provisions of the Act, to interpret the Act or exemption Notifications issued thereunder, by resorting to assumptions impermissible in law. For the aforesaid reason, the adjudication order is fallacious and unsustainable. It is accordingly quashed. The appeal is allowed.”
Saaransh: Last Month Standing - An Actor prepares for March, 2010.
(See 2013-TIOL-1150-CESTAT-MUM)
