TMI Blog2020 (2) TMI 864X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. Commissioner confirmed Service Tax demand of ₹ 19,02,103/- under the category of Management Consultancy Services on value of reimbursable expenses received by the Appellant during October, 2001 to March, 2006 aggregating to total service tax demand of ₹ 63,85,579/- along with interest and penalties under Section 76 and Section 78 of Chapter V of the Finance Act,1994. The Ld. Commissioner (Appeals) by the impugned Order-in-Appeal dated 07-10-2010, confirmed Service Tax demand of ₹ 33,28,942/- under the category of Commercial Training or Coaching Services provided by the Appellant during April,2006 to March,2008 along with interest and upheld penalties imposed under Section 76 Section 78 of the Act. 3. The Learned Advocate for the Appellants Shri Kartik Kurmy submits that the demand of Service Tax of ₹ 19,02,103/- on reimbursable expenses received during October,2001 to March,2006 is clearly not sustainable in view of the facts that the Service Tax (Determination of Value) Rules, 2006 under which the tax is demanded, came into force subsequently from 19-04-2006, hence, under the said subsequent provision no tax can be demanded for the earlier perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in case of dissolution of the institute, any property that shall remain after satisfying the debts and liabilities shall not be distributed amongst the members of the institute but shall be given to some institution having similar aims and objects. 4. The Learned Advocate further submits that the Government of India, Ministry of Finance, Department of Economic Affairs, New Delhi, has sponsored candidates from 90 developing countries to the Appellant institute for vocational training under Technical Cooperation Scheme of Colombo Plan, Indian Technical and Economic Cooperation and Special Common Wealth Assistance for Africa programme of the Government of India. He also submitted that the training provided by them are in the nature of vocational training which are exempted under Notification No.9/2003-ST Dated 20-06-2003 as amended, and Notification No.24/2004-ST dated 10-09-2004. The Ld. Advocate for the Appellants referring to Para 3 of the Show Cause Notice dated 17-10-2008 issued by Ld. Joint Commissioner, Bhubaneswar-II, contended that from the very beginning they are claiming that the training provided by them are vocational training which is not commercial type training. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order of the Supreme Court. In the said judgment of Administrative Staff College of India, the Ld. Tribunal categorically held that the word commercial under Section 65(26) and Section 65(27) is relevant and institution which is providing the coaching and training without any profit motive and is exempted under the Income Tax Act, such centres cannot be considered as commercial centre and therefore, no service tax can be levied. It is contended by the Advocate that the Finance Act, 2010 has not upset the said judgment of the Hon ble Apex Court nor the object of the Finance Act, 2010 was to upset the said judgment of the Hon ble Apex Court which was passed on 29-03-2010 i.e. much before the coming into force of the Finance Act, 2010 w.e.f. 10-05-2010 where the Finance Bill, 2010 was tabled in the Parliament on 26-02-2010, the said judgment is passed on 29-03-2010 and the Finance Act, 2010 was enacted on 10-05-2010, hence, the case of the Appellant is directly covered by the judgment of the case of Administrative Staff College of India cited supra which is not upset by the Finance Act,2010. 5. On grounds of limitation, the Learned Counsel alternatively submits that, in any ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such retrospectivity is otherwise apparent. 7. Heard both the sides and perused the appeal records. 8. We find 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. reported in 2018 (10) G.S.T.L. 401 (SC). 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. cited supra. Hence, the demand of Service Tax of ₹ 19,02,103/- on this count is clearly not sustainable. 9. We find that the training provided by the Appellant is relating to enhancement of ability, ski ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in particular area of specialisation and are not general academic courses, hence, exempted under Notification No.9/2003-ST and Notification No.24/2004-ST and amendment by Notification No.3/2010-ST substituting the explanation of Notification No.24/2010-ST is prospective in operation from 27-02-2010. In the case of Franklin Aviation Services P.Ltd. Vs. CST cited supra which is maintained by the Hon ble Apex Court, it is held that fulfilment of criteria for employment and self employment is not necessary and the ability to seek employment after completion of training courses in aviation, hospitality and travel management is sufficient for claiming exemption under Notification No.24/2004-ST, since, ability of trainees to seek employment after completion of such courses is undisputed the assessee is entitled to claim exemption under the said Notification. 11. We, however, find it difficult to accept the contention of the Ld. Advocate for the Appellants that in absence of validation clause in the Finance Act,2010, the retrospective amendment to Section 65(105)(zzc) would not affect the case of the Appellants. The Ld. Authorised Representative for the Respondent is right in placing r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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