ST - Commercial Training - Appellant providing computer training but certificate was issued by State Board - as per definition only exclusion is to an Institute which issues certificates recognized by law - Demand upheld: CESTAT
By TIOL News Service
MUMBAI, APR 25, 2014: TWO appeals have been filed - one against a confirmed demand and the other against rejection of a refund claim.
Brief facts of the case are that SCNs were issued to the appellants raising demand of service tax on the ground that the appellants are providing commercial training and coaching services. For the period July, 2004 to March, 2005 the appellants paid service tax as per the direction of the Revenue and subsequently filed a refund claim on the ground that theywere not providing any taxable service. Since this refund has been rejected by the lower authorities the appellant is before the CESTAT. There is also another appeal, as mentioned, against an order confirming a ST demand on the same issue.
It is submitted that the appellants are an Institute providing computer training which is recognized by Maharashtra State Board of Vocational Examination and hence excluded from the purview of taxable services. They rely upon the certificate issued by the Maharashtra State Board of Vocational Examination and which is counter-signed by the appellants. Inasmuch as the appellants were providing training course which is recognized by law, the demand is not sustainable, submitted the appellant. They place reliance on the decision of Delhi High Court in Indian Institute of Aircraft Engineering vs. UOI - 2013-TIOL-430-HC-DEL-ST to support of their contention.
The Revenue representative submitted that the appellants are not issuing any certificate which is recognized by law and hence they are liable for service tax.
The Bench adverted to the definition of ‘Commercial training or coaching centre' and observed that the appellants were providing training but are not issuing any certificate; thatthe certificate is issued by Maharashtra State Board of Vocational Examination and as per the definition the only exclusion is in respect of institute or establishment which issues any certificate or diploma or degree or any educational qualification recognized by law.
It was further observed that in the case of Indian Institute of Aircraft Engineering the Institute was issuing certificate to the trainees which is approved by the Directorate General of Civil Aviation and in those circumstances, the Delhi High Court had held that the said appellants were not providing any taxable service under “commercial training & coaching centre”. Inasmuch as since the facts of the present case were different, the ratio of the said decision would not be applicable and, therefore, there is no merit in the contention of the appellants that the appellants are not providing any taxable service, the Bench held. The demand was upheld.
However, noting that the appellants were under the bonafide belief that the institution is recognized by Maharashtra State Board of Vocational Examination and hence are not liable to pay ST, the Tribunal, by taking cognizance of the provisions of section 80 of FA, 1994 set aside the penalties imposed u/s 76 & 78 of the FA, 1994.
As regards the appeal against the rejection of refund claim, the Bench observed that since the appellants are held liable to pay ST for the taxable services rendered, the said appeal is without any merit and hence dismissed.
The appeals were disposed of.
In passing: Countersigned (v) - endorsed, indorsed, signed, corroborated, certified…
(See 2014-TIOL-636-CESTAT-MUM)
