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TMI Blog2017 (3) TMI 1027X X X X Extracts X X X X X X X X Extracts X X X X ..... el Ltd., U.K., an accrediting agent. The dispute in the present case relates to the liability of appellant - assessee to pay service tax on the consideration received from participants for imparting training. The tax liability was sought to be confirmed under the category of "commercial training or coaching services". 3. The second issue is relating to appellants - assessee's liability to pay service tax on payment made to Edexcel, U.K., under the tax category of "franchisee service". The third issue is relating to inclusion of various reimbursable expenses in the tax value under the category of franchisee services. 4. The original authority, upon adjudication of the demands issued to the appellant - assessee, held that they are providing taxable service under the category of commercial coaching or training and they are not exempted in terms of Notification No.24/2004-ST dated 10.09.2004 available to vocational training institute. It was held that the course offered by the appellant - assessee did not impart skills to enable the participants to engage in self-employment. On the second issue, the adjudicating authority held that the appellant - assessee has been granted representa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id not confer any representational right to the appellant- assessee to sell or manufacture goods or to provide service or undertake any process identified with franchisor. M/s. Edexcel is an internationally recognized accreditation body. They have entered into an agreement with M/s. Edexcel and in terms of the same they maintained certain standards of training. On completion of the course, a Diploma certificate is issued by Edexcel. There is no representational right conferred on the appellant - assessee in conducting such coaching or training in India. (c) The appellant - assessee have appointed various franchisees throughout the country for imparting similar training in terms of the agreement entered into with these franchisees. Various expenditure borne by the appellant - assessee are to be reimbursed by the franchisees. These amounts are reimbursed on actual basis with no mark-up. It is also submitted that reliance placed on Rule 5 (1) of Service Tax Valuation Rules is no more sustainable as the said rule has been held to be ultra vires of the substantive provisions of Finance Act, 1994, by the Hon'ble Delhi High Court in the Intercontinental Consultants and Technocrats Pvt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication provides exemption to taxable services provided in relation to commercial training or coaching by a 'Vocational Training Institute'. "(i) "Vocational training institute" means a commercial training or coaching centre which provides vocational training or coaching that impart skills to enable the trainee to seek employment or undertake self-employment, directly after such training or coaching;" 10. In the first proceedings (impugned order-in-original No.36-38/ST dated 30.11.2010), the Original authority held that as the courses offered by the appellant - assessee do not provide for skills to the trainees to engage themselves in self employment. As such, the exemption under the said Notification will not be available. We find that the said reasoning is without any legal basis and is totally fallacious As seen from the terms of the Notification, it is clear that the training or coaching should impart skills to enable the trainee to seek employment or undertake self-employment. Admittedly, in the present case there is no dispute regarding the ability of the trainees to seek employment in the fields in which they have obtained training as per the courses offered by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... say in aviation industry. There cannot be any other purpose for joining such a course. Naturally, they join such courses only because it is provided by an institute which equip them with skills and develop ability in them to persue a career in the desired field. It is nobody's case that all trainees who pass out from such an institute would necessarily get employment or be successful in being self-employed in the chosen field, but definitely such persons who undergo such training or coaching have an 'advantage' or 'edge' over those who have not. It is this 'edge' or 'advance', which to my mind is what is referred to as "imparting skill to enable the trainee to seek employment or undertake self-employment...." in Notification No. 24/2004-S.T., dated 10-9-2004. Since this notification operated during the entire period of demand under SCN dated 20-10-2010, the benefit of the exemption contained therein cannot be denied." 11. We are in general agreement with the above observation of the original authority. However, we note that the ability to seek employment after the completion of a training course in terms of the explanation provided in the said Notification itself is sufficient fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a BTEC Centre, Edexcel provides for staff development, to prepare the Institute to the required level of quality standards. The agreement entered into by the appellant assessee with Edexcel is only for that purpose. We are not able to discern any representational right offered to the appellant - assessee in the scope of the said agreement. The Original Authority also did not elaborate what type of representational right has been granted by Edexcel to the appellant - assessee in terms of the said agreement. Basically, Edexcel provides for an international recognition of the courses offered by the appellant - assessee, for which certain standards are to be met. On completion of the training course, the Diploma Certificate is issued to the participant by Edexcel. The appellant assessee is paying certain consideration for the recognition of their institute and for award of Diploma Certificate by Edexcel. There is no representational right in the scheme of things, as laid down in the agreement. 15. On the third issue regarding the liability of the appellant- assessee to pay service tax on various reimbursable expenditures incurred by them, we note that the reliance placed by the origin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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