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2020 (2) TMI 864 - AT - Service TaxLevy of service tax - reimbursable expenses received - Management Consultancy Services - period October, 2001 to March, 2006 - vires of Rule 5 of the Service Tax (Determination of Value) Rules,2006 - time limitation - HELD THAT:- The demand of Service Tax of ₹ 19,02,103/- on reimbursable expenses is clearly not sustainable for the reason firstly that the Service Tax (Determination of Value) Rules, 2006 came into force w.e.f. 19-04-2006 whereas the period of dispute on this count is from October,2001 to March, 2006. Since, the valuation rules are substantive in character, it cannot be given retrospective effect as held by the Hon’ble Supreme Court in the case of UOI Vs. Inter Continental Consultants and Technocrats Pvt. Ltd. [2018 (3) TMI 357 - SUPREME COURT] - Secondly, Rule 5 of the Service Tax (Determination of Value) Rules,2006 which seeks to include reimbursable expenses into the gross amount charged is declared ultra vires of Section 67 of the Finance Act,1994 by the Hon’ble Supreme Court in the case of UOI Vs. Inter Continental Consultant & Technocrats Pvt. Ltd. - demand set aside. Commercial Training or Coaching Services - HELD THAT:- The training provided by the Appellant is relating to enhancement of ability, skill development and productivity are vocational training which are not general academic courses and the Appellant is entitled to exemption under Notification No.9/2003-ST Dated 20-06-2003 as amended and Notification No.24/2004-ST Dated 10-04-2004 which exempts vocational training by Commercial Training or Coaching Centre from levy of service tax. As per Explanation to Notification No.9/2003-ST Dated 20-06-2003 vocational training institute means a commercial training or coaching centre which provides vocational coaching or training that import skills to enable the trainee to seek employment or undertake self employment directly after such training or coaching. Further, Notification No.24/2004-ST Dated 10-09-2004 is amended by Notification No.3/2010-ST dated 27-02-2010 by which the Explanation is substituted w.e.f. 27-02-2010 which defines vocational training institute to means an Industrial Training Institute or Industrial Training Centre affiliated to the National Council for vocational training offering courses in designated trades as notified under the Apprentice Act. The said amendment is applicable from 27-02-2010 - The period under dispute in the instant case is prior to 27-02-2010. From the perusal of Para 3 of the show cause notice dated 27-10-2008, it is found that the Appellant have been claiming that they are providing vocational training services which are not commercial training services. The case of the Appellant is directly covered by decision of the Tribunal in the case of CCE Vs. Ashu Exports Pvt. Ltd. [2014 (3) TMI 863 - DELHI HIGH COURT] wherein it is held that courses imparted in procedural and practical skill based training in areas such as export-import management, retail management and merchandising would be entitled to exemption under Notification No.9/2003-ST and Notification No.24/2004-ST. Extended period of limitation - Penalties - HELD THAT:- No offense and penalties can be created with retrospective effect nor in the facts and circumstances of the case extended period of limitation can be invoked - thus, neither extended period of limitation can be invoked nor the penalties can be sustained. The impugned Order is seta side to the extent of demand prior to March, 2006 and the period beyond the normal demand in Section 73 of the Finance Act, 1994 - appeal disposed off.
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