TMI Blog2019 (5) TMI 1249X X X X Extracts X X X X X X X X Extracts X X X X ..... any stretch of imagination, be considered as imparting skill or knowledge or lessons on any subject or field. To arrive at a conclusion that the Appellant was conducting coaching or commercial training activity it was imperative for the Commissioner to have based his conclusion on some positive evidence in this regard, rather than drawing such an inference. In any case, for levy of service tax, there has to be an evidence that the Appellant was conducting commercial coaching or training. The contention of the learned Authorized Representative of the Department that the holding of the Test is itself a skill and, therefore, the Appellant is providing commercial training or coaching cannot also be accepted. No skill or knowledge is being provided to the candidates appearing at the test. Appeal allowed - decided in favor of appellant. - Service Tax Appeal No. 52085 Of 2016-DB - Final Order No. 50707/2019 - Dated:- 8-5-2019 - MR. JUSTICE DILIP GUPTA, PRESIDENT And MR. BIJAY KUMAR, MEMBER (TECHNICAL) Shri A.R. Madhav Rao And Shri Anurag Soan, Advocate for the Appellant Shri Vivek Pandey, Authorized Representative for the Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the Appellant, the holding of such a test was not a part of any taxable service during the relevant period i.e. April, 2012 to June, 2012 and, therefore, no service tax was paid by it. 4. Earlier, a demand cum show cause notice dated 17 April, 2013 was issued to the Appellant for the period 2007-08 2011-12, since during the course of audit the following discrepancies were noticed:- i. Non-payment of Service Tax on commission income received in convertible foreign exchange but in respect of Service provided in India to service recipients located outside India. ii. Irregular availment of CENVAT Credit on the strength of invoices which were not addressed to the registered premises of the assessee. iii. Non-payment of Service Tax on Income received for providing training to students for taking IELTS Test. 5. Subsequently, another demand cum show cause notice dated 6 May, 2014 was issued to the Appellant for the period commencing 1 April, 2012 upto 31 March, 2013. This notice was restricted to the income received by the Appellant for conducting the IELTS test. It needs to be noticed that the Appellant sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actor for conducting the test. According to the Commissioner, the balance amount of ₹ 550/- retained by the Appellant could not be for the purpose of conducting the test as the test had been outsourced to a sub-contractor. The Commissioner also noticed that the official website of the Appellant shows that the Appellant is conducting the IELTS test and also providing advice, practice questions and holding classes and seminars to help the students for better preparation which, clearly shows that the Appellant is providing training to the students. The relevant paragraphs of the Order of the Commissioner are reproduced below:- 4.9. To better understand the business module of the notice, I have gone through the IELTS Centre Agreement dated 09.09.2010 entered into between the notice and IELTS Australia Pvt. Limited CAN 008 664 766. I find that ₹ 7,200/- per candidate has been fixed as IELTS Test fee under the agreement. Out of this amount of ₹ 7,200/-, as per Schedule 1 to the said agreement, Australia Pvt. Limited shall be entitled to get of ₹ 3,600/- per student on which the notice has been paying service tax under franchise service under reverse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aining classes actually took place; that where the classes took place, the number of classes which were taken, the number of students who attended the classes; that without such evidence the case of the department that the Noticee trained/coached student does not stand to any reason and is devoid of merit. I find that the contention of the notice does not hold good as from the website it is clear that they were not working as invigilator but also as a counselor and providing training to the students online for better preparation of IELTS tests. Hence, services provided by the Noticee cannot be limited to invigilator services but the services of the Noticee are beyond that. Hence, I am of the considered view that the services provided by the notice were taxable under Commercial Training or Coaching Service as defined under Section 65(26) of the Finance Act, 1994. Therefore, contention of the notice that details mentioned on the invoice cannot determine the taxability of the transaction cannot be accepted because it is not merely the language used on the invoice but other facts, as mentioned above, also substantiate the taxability of their activity. Hence, services of the Notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant has not enclosed with the appeal, the relied upon documents contained in the earlier show cause notice dated 17 April, 2013 for the period 2007-08 upto 2011-12, though the subsequent show cause notice dated 6 May, 2014 out of which the impugned order arises, mentions that all the charges and allegations made in the earlier show cause notice dated 17 April, 2013 shall apply mutantis-mutandis; and (iv) That holding of the test itself is a skill and, therefore, would fall under the category of commercial training or coaching service. 10. We have considered the submissions advanced by the learned counsel for the Appellant and the learned Authorized Representative of the Department. 11. The Appellant claims to be conducting the IELTS Test in India. This test was developed by British Council, the University of Cambridge and IELTS Australia Pty Ltd. This test is an internationally recognized english language proficiency test and measures the ability of individuals to communicate in english. The test is primarily undertaken by individuals who desire to study or work in a country where english is the main language of communication. In or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , skill and diligence and in a timely manner. Test Centre Costs 5.4. The IELTS Centre is responsible for bearing all costs associated with the Test Centres. Integrity principles 5.6. The IELTS Centre will, and will ensure that it and its Personnel-comply with all applicable law in the relevant overseas jurisdiction; and (a) behave honestly and with integrity; (b) not accept in relation to the IELTS Test additional payments or other benefits of any kind beyond the consideration that is legitimately due to the IELTS Centre under this agreement, any related agreement or any applicable law; (c) provide accurate and reliable information, particularly in any material that is intended for use by their parties (for example, marketing materials); and (d) avoid behavior that may be characterized as undue influence of favouritism, whether actual or perceived. 14. Clause 7 of the agreement deals with premises and is reproduced below: 7. Premises Responsibility for Premises 7.1. The IELTS Centre will oper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g examinations (an Examiner). 8.5. The IELTS Centre will ensure that each Examiner. (a) Sings the confidentiality undertaking set out in the IELTS Manuals of Procedure before commencing work; (b) examine IELTS Test candidates in accordance with the IELTS Manuals of Procedure; and (c) complies with the IELTS Manuals of Procedure, the IELTS Code of Practice, the Examiners terms of appointment and the reasonable directions of IA. Other personnel 8.6 The IELTS Centre will ensure its Personnel (including Examiners and invigilator): (a) sign and return the confidentially undertaking set out in the IELTS Manuals of Procedure before commencing work; and (b) comply with the IELTS Manuals of Procedure and this agreement; 16. Schedule 1 of the agreement deals with final arrangements and payments and is as follows:- Financial Arrangements Payments Calculation of Fees (a) Subject to the provisions of this agreement and Schedule 1, IA shall be entitled to a fee calculated as follows: (i) INR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , and for those wishing to train or study at below degree level. 19. The test is an internationally recognized english language proficiency test and measures the ability of individuals to communicate in english across under four language skills, namely listening, reading, writing and speaking. A report for each of the four skills is made available after the test. The Appellant has enclosed as an annexure to the Appeal, a copy of letter sent to a candidate for the General Training Module Test as also for the Academic Module Test. It specifically mentions that the Appellant has received the test fee payment of ₹ 7,900/- against the IELTS Test. After mentioning the documents required, the candidate has been informed that the listening, reading and writing Test will be held on a particular date at a particular centre. 20. It has, therefore, been contended by learned counsel for the Appellant that there is no element of commercial training or coaching involved as the Appellant merely holds the test and declares the result. It would, therefore, be appropriate at this stage to reproduce Clauses (26) and (27) of Section 65 of the Act which define Commer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant informs the candidate that free support materials can be found on other sites cannot lead to an inference that the Appellant is providing such services. Likewise, the contents on the face book also do not convey that the Appellant is providing such service. In any view of the matter, the Appellant has not received any consideration for any of these alleged activities as is not only clear from the agreement but also from the receipts given to the students. What is important to notice is that the show cause notice dated 17 April 2013 alleges that the Appellant is providing training because the receipt raised by the Appellant mentions the name of the module as General Training Module . This is a perverse inference because the name of the module is General Training Module and mere use of the word training in this test module does mean that some sort of training is imparted by the Appellant. 23. In paragraph 4.9 of the impugned order reproduced above the Commissioner rejects the contention of the Appellant that the fees paid by the students was for the conduct of the test for the sole reason that out of the fees received from the students, ₹ 3,600/- was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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