By TIOL News Service

MUMBAI, DEC 09, 2013: THE appellants are conducting a two year course in Post Graduate Diploma in Management (PGDM) at their Sadhana Centre for Management & Leadership Development (SCMLD), Pune. Appellants are registered as a provider of service under Commercial Training & Coaching and accordingly paid Service Tax relating to the said course during 2004-05.

Later, they filed a refund claim of Rs.8,56,522/- on the grounds that they were not liable to pay the service tax for period other than 1.7.2004 to 9.9.2004. The said claim was on the grounds that they are entitled to exemption under Notification No. 24/04-ST dated 10.9.2004, their course being Vocational Training.

As their claim was rejected by both the lower authorities, the appellant is before the CESTAT.

It is submitted since the training provided by the Appellant pertains to Marketing, Finance, Human Resources Management, System Management and Manufacturing and Operations Management, it clearly is vocational since Marketing, Finance, Human Resources Management, Systems management and Manufacturing and Operations Management are all occupations, business, profession or calling and that upon receiving such training the trainees have been recruited/employed by various corporate bodies/companies/banks/financial institutions.

It is also submitted that in the case of Prof. Ulhas V Bapat Vs. CCE - (2013-TIOL-1510-CESTAT-MUM) Tribunal has in paras 5.6 and 5.7 held that the trades designated by the National Council for Vocational Training under the Apprentices Act would be a useful guide in determining whether the training in a particular subject/field can be considered as vocational training; that the list of subjects/fields which are designated for vocational training as downloaded from the Website of Board of Practical training (E.R.), Kolkata lists various subjects/fields under Business and Commerce viz. Accountancy & Auditing, Banking, Basic Financial services, Business Math Statistics, Industrial management, Marketing and Salesmanship, Office Management, etc. Inasmuch as it is thus clear that the fields/subjects in which the Appellant is providing training are considered as vocational.

The decisions in Ashu Export Promoters (P) Ltd. Vs. CST - (2011-TIOL-1982-CESTAT-DEL), IILM Film & Media School Vs. CST - (2013-TIOL-879-CESTAT-DEL), Wigan & Leigh College (I) Ltd. Vs. Jt. CST - (2007-TIOL-1852-CESTAT-BANG), WLC College India Ltd. Vs. CST - (2012-TIOL-546-CESTAT-DEL) Pasha Educational Training Inst. Vs. CCE - (2009-TIOL-288-CESTAT-BANG) & K.K. Academy P. Ltd. Vs. CST - (2008-TIOL-221-CESTAT-MAD) were also relied upon.

The Revenue representative adverted to the Larger Bench decision of the Tribunal in the case of M/s. Great Lakes Institute of Management Ltd. Vs. CST, Chennai reported in - (2013-TIOL-1480-CESTAT-DEL-LB) and submitted that activities of imparting skills, knowledge, lessons on any subject or field or when provided by any entity, institution or establishment which is excluded by a specific and legislated exclusionary clause would alone be outside the fold of the taxable activity. It is further submitted that in the case of Prof. Ulhas V. Bapat, it is held that course conducted in Spoken English which helps in getting job in Call Centres is not a Vocational Course; that Vocational Course are for the people who have passed 8th, 10th or 12th standard and not for those who are already graduates. It is also argued that if the appellant's argument is accepted then all graduation/post-graduation or even Ph.D/Research program and all professional courses will become Vocational.That vocational courses are very different from professional or academic courses and, therefore, the appeal should be dismissed.

The Bench after considering the rival submissions and giving considerable thought to the issue observed thus -

+ From the course content, it is clear that courses are academic in nature and covers broad spectrum of subjects as diverse as Micro Economic, Business Communication, Psychology & Organizational Behaviour, Commercial Laws, Computer based Data-Analysis, Corporate Finance, Negotiation & Contracting. In the second year, courses though gets limited to the field of specialization but are again diverse, theory oriented and academic in nature. The content of courses can by no stretch of imagination be called vocational. No doubt the two years course will help candidates in understanding various facets of management and get employment. It is a professional management course. This cannot be considered as Vocational Course that imparts skill to enable the trainee to seek employment or self-employment after the said course.

+ Adverting to the Tribunal decision in Prof. Ulhas Bapat (supra), the Bench observed -

"Just because few subjects (that also elementary level) of M.B.A. Course are different Designated Trades in the Apprentices Act does not make whole of M.B.A. Course as Vocational Course.The nearest Trade is Human Resource Executive, Marketing Executive, Finance Executive. These trades are in very very narrow campus compared to M.B.A. Course being conducted by the appellant. Even the level as name "Executive" suggests is elementary. Under the circumstances, we do not consider that the course conducted by appellant can be considered as Vocational Course within the scope of Notification No. 24/2004-ST dated 10.9.2004. Accordingly, we hold that service provided by the appellants are not eligible for the benefit of Notification No. 24/04-ST dated 10.9.2004."

+ In the matter of the case laws cited by the appellant, the Bench observed -

"We have gone through each of the cases. We find the facts of the present case are distinguishable as none of these cases cover a general M.B.A. program with content of the program as wide and academic as in the present case. We do not consider it necessary to discuss each of these cases here."

The CESTAT concluded thus -

"9. We also note that Notification No. 24/2004-ST dated 10.9.2004 has been amended vide notification No. 3/2010-ST dated 27.2.2010, wherein the Explanation relating to Vocational Training Institute is replaced by new definition. As per new definition, Vocational Training Institute means as Industrial Training Institute or Industrial Training Centre affiliated to the National Council for Vocational Training, offering courses in designated trades as notified under the apprentices Act, 1961 (52 of 1961). Though the said explanation was inserted in 2010, but indicates the scope of term vocational training in specific terms."

In fine, the appeal was dismissed.

(See 2013-TIOL-1830-CESTAT-MUM)