At, Customs Excise Service Tax Appellate Tribunal West Zonal Bench At Mumbai
By, THE HONORABLE JUSTICE: RAMESH NAIR
By, MEMBER AND THE HONORABLE JUSTICE: RAJU
For Petitioner: Darshan Ranavat, CA And For Respondents: B. Kumar Iyer, Supdt. (AR)
1. The appeal is filed by Indian Institute of Excellence & Consultancy Pvt. Ltd. against confirmation of demand of service tax and imposition of penalty by lower authorities in respect of services provided by the appellant. Against the confirmation of demand the appellant had approached the Tribunal. However, Tribunal had remanded the said matter back to the adjudicating authority with direction to verify if the notice has paid the entire amount of service tax and whether the cenvat credit availed by them or not.
2. Ld. CA for the appellant argued that the appellant are involved in providing commercial training and coaching services. Their activity involved training of persons who were either insurance agent or who aspired to be insurance agent. He argued that such training amounts to vocational training, therefore, services provided are exempt in terms of notification No. 9/2003-ST and notification No. 24/04-ST. It was however admitted that from the period 01.7.2004 to 10.09.2004 when the notification No. 9/2003-ST was rescinded and when notification No. 24/04 was introduced they were not entitled to the benefit of said exemption. It was argued that for this period they have taken service tax registration and paid service tax in November 2005. It was argued that they were under bonafide belief that the activities undertaken by them is vocational training and they were eligible for the said notification. He relied on the definition of Vocational Training Institute appearing in notification No. 9/2003 and 24/04 which is as under:-Vocational Training Institute means a commercial training or coaching centre which provide vocational coaching and training that impart skill to enable the trainee to seek employment or undertake self employment, directly after such training or coaching.
3. Ld. Counsel argued that vide circular No. 59/8/2003 dated 20.07.2003, it was clarified that training in the field of typing, shorthand, TV/Vehicle repair, tailoring etc. were examples of Vocational Training. He argued that training in the field of insurance is also a vocational training. He relied on the decision of Pasha Educational Training Institute : 2009 (14) STR 481 wherein it has been held that a training given in the field of insurance amounts to vocational training and eligible for exemption under notification No. 9/2003. It was further argued that the appellant are entitled to various credits under cenvat credit and the same have been wrongly denied.
4. Ld. AR took us through the impugned order and relied on the same. He argued that the training given for the insurance activity does not amount to vocational training.
5. We have gone through the rival submissions. We find that the first issue that needs to be decided is if the nature of training provided by the appellant amounts to vocational training or not. We find that in identical matter, the Tribunal in Pasha Educational Training Institute (supra) has held as follows:-
"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."
6. In view of the above, we find that the appellants are providing vocational training and service provided by them are exempt from service tax during the period of notification No. 9/2003 and 24/2004. For the intervening period, the appellants would be liable to pay service tax.
7. Since the activities conducted by the appellant are exempt from service tax for most of the period, the credit of cenvat would have to be recalculated for the same period. As a result, the matter relating to recalculation of demand of duty and credit available for the said period needs to be remanded to the original adjudicating authority.
8. The ap
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pellant had not obtained the service tax registration during the period when no exemption was available to them and had not filed any return during that period. In these circumstances, the appellants are liable to penalty under Section 76, 77 and 78 of the Act read with Rule 4, 6 and 7 of the Rules. However, the quantum of the penalties would have to be recalculated in terms of revised demand of service tax for the limited period. Consequently the impugned order is set aside and the matter is remanded to the original adjudicating authority for recalculation of demand and cenvat credit and consequent