Availability of exemption from service tax to Computer Training Institute

PJ/Case Laws/2010-11/1065

Case: Commissioner of Central Excise v/s Sunwin Technosolution P Ltd

Citation: 2011 (21) STR 97 (SC)

Issue – cum- Brief Facts:- Whether the Computer Training Institute was covered under the exemption Notification dated 10.09.2004? Whether in view of Notification dated 07.06.2005 service tax would not be payable by Computer training Institute for the period from 10.09.2004 to 15.06.2005.

Reasoning of Judgment:- The Supreme Court perused the earliest Notification dated 20.06.2003 and held that it is indicated that the central government intended vide this Notification to exempt the taxable services in relation to commercial training or coaching imparted by – (a) vocational training institute; (b) a computer training institute; (c) a recreational training institute. And the definition of these 3 types of institutes was also given therein. It was noted that this notification which came into force on 01.07.2003 remained in force till 29.02.2004.

It was noticed that thereafter another Notification dated 10.09.2004 was issued exempting taxable services provided by commercial training or coaching by a vocational training or a recreational training institute. The definition of a computer training institute was specifically excluded. From a perusal of this Notification it is clear that a computer training institute is neither included in the said Notification nor it is defined and it specifically stood excluded from the ambit of the said Notification.

It was noted that subsequently another Notification dated 07.06.2005 was issued which added a proviso to Notification dated 10.09.2004 specifically excluding computer training institute from the scope of Notification dated 10.09.2004. This Notification became effective from 16.06.2005.

The Supreme Court further noted that the respondent-assessee had contended that the specific exclusion on 07.06.2005 meant that the computer training institute were covered under Notification No. 10.09.2004 till 15.06.2005.

It was held that the Central Government was fully conscious of the implication of specific exclusion of computer training institute from the purview of Notification No. 10.09.2004 vide Notification dated 07.06.2005. The Central Government was fully conscious of the fact that the said computer training institute should not get the exemption and intended the same as shown by specifically excluding the same from the purview of the notification dated 10.09.2004. The notification was also in operation from the date its issuance i.e. from 10.09.2004 to 15.06.2001 without there being any other intendment.

With regard to contention of the respondent it was held that the said amendment was brought in by adding the proviso more or less in the nature of clarification and the same was made effective from 16.06.2005. The Government thought it fit to make it abundantly clear by issuing the said Notification. Thus, it was held that the liability to pay service tax between the period 10.09.2004 to 15.06.2005 subsisted.

Impugned order set aside.

Decision:- Appeal allowed to the above extent.

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PJ/Case Laws/2010-11/1065

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