By TIOL News Service

MUMBAI, JUNE 27, 2017: THIS is a Revenue appeal.

It is the contention of the AR that the Commissioner (Appeals) has gone beyond the scope of issue by deciding the service classification of the assessee without adducing evidence. Inasmuch as the respondent had registered under Commercial Training & Coaching Services but subsequently sought to change the classification of the services to Business Auxiliary Service and claimed exemption in terms of notification no. 14/2004-STbased on a letter dated JS(TRU) to JS(Rural Department) vide DO letter no. 34/164/2011-TRU dated 26.07.2011 wherein it is clarified that training under centrally sponsored schemes are exempted.

The AR also emphasized that there is a specific clarification issued by Director (Service Tax) in the respondent's own case vide letter no. F.No. 137/02/2011-Service tax dated 10.05.2011 wherein opposite views have been expressed.

Moreover, the refund claim had been filed on 05.09.2011 after a lapse of eight years and, therefore, is barred by limitation, the AR added.

It was further argued that notification 14/2004-S.T. provides exemption only if the activity is in relation to agriculture, printing, textile processing or education; that the Commissioner (Appeals) had wrongly interpreted the term Education; that the nature of course conducted/ service provided by the claimant such as repairing of air conditioner, agri-tourism, aquarium making, dairy milk, milk products making, electric motor rewinding, chalk and candle making are all related to skill development to earn livelihood and, therefore, do not come under the category of education.

The respondent submitted that they are a programme implementing agency working at the behest of Government of Maharashtra through MSFC, MSSIDC with a view to encourage entrepreneurship; that they are working under centrally sponsored schemes through various ministries and departments of government of India and state; that they are not providing any service to the trainee but they are providing training to the trainees on behalf of the central/state government, therefore, their services fall under the category of Business Auxiliary Service.

The Bench observed that the following three issues are needed to be decided -

i) If the service provided by the respondent is covered under Commercial Training & Coaching Services or Business Auxiliary Service.

ii) If the appellants are entitled to benefit of notification 14/2004-S.T. dated 10.09.2004

iii) If the refund claim is barred by limitation.

And held as under -

++ The fact that the respondent are not providing any service to the trainee but they are providing service to central/state government, it is apparent the service provided by them is correctly classified under Business Auxiliary Service, as service provided on behalf of their client. It is seen that order in original itself classifies the services as Business Auxiliary Service.

++ Insofar as benefit of notification 14/2004-S.T. is concerned it is seen that the same is available only if the activity is undertaken in relation to agriculture, printing, textile processing or education. …it is seen that the definition includes training as a component of education. It is seen that the activities conducted by the respondent are in nature of training for a particular purpose like repairing of air conditioner, agri-tourism, aquarium making etc. In these circumstances, it cannot be denied that these activities are related to education. Thus the benefit of notification 14/04-S.T. cannot be denied to the respondent.

++ Insofar as third issue on limitation is concerned, it is seen that the same is not challenged by the review order.

Concluding that there is no merit in the Revenue appeal, the same was dismissed.

(See 2017-TIOL-2181-CESTAT-MUM)