Whether practical training of audit/accounts covered under vocational training ?

PJ/CASE LAW/2015-16/2809

Case:- COMMISSIONER OF CENTRAL EXCISE, NAGPUR VERSUSACT CAREERS P. LTD.

Citation:-2015 (39) S.T.R. 632 (Tri. - Mumbai)

Brief facts:-This appeal is preferred by the Revenue against Order-in-Appeal No. SR/295/NGP/2010, dated 20-9-2010.
The issue involved in this appeal is whether the course conducted by the respondent is covered under the category of “Commercial Training and Coaching” service as envisaged under Section 65(27) of the Finance Act, 1994. They find the period involved in this case is April, 2008 to March, 2009. The adjudicating authority after following the due process of law confirmed the demands raised against the respondent assessee holding that the curriculum which has been put forth by the respondent assessee will be covered under the category of “Commercial Training and Coaching” service and not eligible for availing the benefit of Notification 24/2004-S.T., dated 10-9-2004 as amended by Notification 3/2010, dated 27-2-2010.
On appeal, the first appellate authority after considering the submissions made before him has after considering the facts of the case, came to the conclusion that the services rendered by the appellant would be eligible for the benefit of Notification 24/2004-S.T. as amended. Revenue is aggrieved by such an order and has filed the appeal.

Appellant’s contention:- Ld. Departmental Representative after taking through the records would submit that the training imparted by the assessee is for furtherance of knowledge of the trainee and does not enable them to seek employment or undertake self-employment which is the prime requirement of the definition availing the benefit of Notification 24/2004 as amended.
He has also relied upon C.B.E. & C. Circular No. 107/01/09-S.T., dated 28-1-2009 and reads the same. He would rely the judgment of this Tribunal in Sadhana Educational & People Dev. Services Ltd. v. CCE - 2014 (33)S.T.R.575 (Tri.-Mum.)and Prof. Ulhas Vasant Bapat v. CCE - 2013-TIOL-1510-CESTAT-MUM = 2015 (37)S.T.R.1034 (Tri.-Mum.)and read extensively from the said judgments.

Respondent’s contention:- Ld. CA reiterated the impugned order.

Reasoning of judgment:- Heard both sides and perused the record. They find that the submissions put forth by the ld. Departmental Representative and the grounds of appeal as taken by the department are not in consonance with the factual matrix as has been considered by the first appellate authority. The first appellate authority while considering the entire issue, during the relevant period in question, recorded the following findings :
“11. The aforesaid curriculum imparts skills to the students in the field of practical accounting, auditing, etc., which enables them to get direct employment as Asst. Manager (Accounts & Finance), Asst. Commercial Manager, Executing (Accounts & Finance), Manager Operations. Accounts Executive, Audit Executive Assistant, Back Office Asst etc. Further, the student can opt to practice as independent accountants maintaining books of account of small business houses on contract basis and or decide to practice as Income-tax or Sales Tax/Vat practitioners. “The nature and scope of the course is designed with the object of providing employment to the students and/or enabling the students to undertake self-employment directly, after such training in the field of accounts and taxation, which establishes that their institute fulfilled the erstwhile criteria of a vocational training institute. Hence, the appellants are entitled to exemption under the category vocational training institute in terms of the Notification No. 24/2004, dated 10-9-2004. The amendment vide Notification No. 3/2010-ST, dated 27-2-2010 has specific mention of coming it into force on and from the date of its publication in the Gazette of India i.e. w.e.f. 27-2-2010 only, where after the mandatory affiliation of institute with National Council for Vocational training is necessary for eligibility for the exemption from service tax. Thus for the period prior to 27-2-2010, the denial of exemption under Notification No. 24/2004-S.T., dated 10-9-2004 by the lower authority is not justified.
12. The answer to the question as to whether the training by the Appellant enables the trainee to seek employment or undertake self-employment directly after such training or coaching is in the affirmative as the department has not disputed that the trainees after having been trained cannot seek employment directly. On the contrary, the appellant has furnished specimen declarations of their students getting satisfactory job placement. It is important to note that only in cases where trainees can seek employment directly after the training can the institute be considered to be covered by the exemption. This view is supported by the following decisions of Hon’ble Authority for Advance Rulings and CESTAT.”
As against the above reproduced factual findings they find that Revenue has not controverted any of the said findings in the grounds of appeal. In the absence of any evidence which would indicate that the training imparted by the respondent does not enable the trainee to seek employment or undertake self-employment, findings of the first appellate authority as factual matrix are uncontested and are to be held as correct.
Ld. Departmental Representative had placed relied on the judgment of the Tribunal in the case of Sadhana Educational & People Dev. Services Ltd. (supra) to canvas the argument that the said judgment was considering the very same issue and has held what is vocational training as per Technician Vocational Apprentices under the Apprentices (Amendment) Act, 1961. He would submit that after examining the engineering and non-engineering training, the Bench held that the benefit of Notification 24/2004-S.T. as amended will not be applicable to the appellant therein.
They have considered the said submissions and perused the judgment of this Tribunal. They find that basically the said judgment was rendered in respect of the courses undertaken by the appellant therein which were two year’s course in PG diploma in management. They find in Para 4.1 the Bench had categorically recorded “The explanation clearly states that training or coaching should be vocational in nature and it should impart skills to seek employment or self-employment after such training.” Subsequently in Para 7 after reproducing the Engineering and Non-engineering trades, the Bench held as under :-
“The nearest Trade is Human Resource Executive, Marketing Executive, Finance Executive. These trades are in very narrow campus compared to MBA course being conducted by the appellant. Even the level as name “Executive” suggest is elementary. Under the circumstances, they do not consider the course conducted by appellant can be considered as Vocational Course within the scope of Notification No. 24/2004-S.T., dated 10-9-2004. Accordingly, they hold that service provided by the appellants are not eligible for the benefit of Notification No. 24/2004- S.T., dated 10-9-2004.”
They find that the training imparted by the respondent herein and as recorded by the first appellate authority would definitely get covered under the category of Finance Executive in Non-engineering trades as notified by the Apprentices (Amendment) Act. Accordingly, they hold that in fact the judgment of the Tribunal in the case of Sadhana Educational & People Dev. Services Ltd. (supra) supports the case of the respondent assessee in this appeal.
They find that the reliance placed by the Departmental Representative on the decision of the Tribunal in the case of Prof. Ulhas Vasant Bapat (supra) would also not carry the case of the Revenue any further as in that case the issue was regarding the coaching the students in English language. In the case in hand, the factual findings as recorded by the first appellate authority (hereinabove reproduced by us) are not contested or controverted by the Revenue.
In view of the foregoing, they hold that the appeal is devoid of merits and needs to be rejected and they do so.
The impugned order is upheld and the appeal is rejected.

Decision:-Appeal rejected.

Comment:-The substance of the case is that in view of decision given in the case of Sadhana Educational & People Development Services Ltd., it is held that the practical training imparted in the field of auditing and accounting to enable the trainees to get jobs of Accountant is covered by the vocational courses and is exempted from levy of service tax for the period prior to 27-2-2010, where after the mandatory affiliation of institute with National Council for Vocational training is necessary for eligibility for the exemption from service tax

Prepared by:- Monika Tak

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PJ/CASE LAW/2015-16/2809

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