2013 (5) TMI 27 - AT - Service Tax

Tribunal grants film business tax exemption, stresses reasoning in quasi-judicial matters.

M/s IILM Film & Media School Versus CST, New Delhi

The Tribunal quashed the adjudication and appellate orders denying a film and media business exemption from service tax under specific notifications. The ... Vocational training - Exemption/immunity on the basis of Notification Nos. 9/2003-ST dated 20.6.2003 and 24/2004-ST 10.9.2004 denied as the course offered by the appellant cannot be described as a vocational course - appellant is a commercial training and coaching centre which imparts commercial training and coaching within the meaning of the expression as defined in Section 65(27) read with Section 65 (26) of the Finance Act, 1994 - Held that:- The exemption Notification merely requires that to be eligible for such exemption the institution must be a commercial training or coaching centre (which the appellant admittedly is, even according to Revenue) which provides vocational coaching or training that imparts skills which would enable the trainee to seek employment or undertake self-employment, directly after such training or coaching & does not require establishment of the fact whether one or some or all of the students of the assessee institute have obtained employment or have pursued self-employment after conclusion of the course of instruction. Thus exemption benefit allowed - In favour of assessee. Issues:Assessment of service tax liability, denial of exemption claimed by the appellant based on specific notifications.Analysis:The appellant, a film and media business, was assessed for service tax liability and penalties. The appellant claimed exemption from service tax based on Notification Nos. 9/2003-ST and 24/2004-ST. The dispute arose as the adjudicating authority denied the exemption, stating that the courses offered did not qualify as vocational training under the notifications. The authority failed to provide adequate reasoning for this decision, which is essential in quasi-judicial matters. The Supreme Court precedent emphasizes the importance of reasons as the link between evidence and conclusions. The authority did not explain how it determined that the courses did not prepare students for employment or self-employment directly after completion.The appellant argued that they provided coaching in various areas relevant to journalism and media, meeting the criteria of a commercial training center offering vocational coaching. The key contention was the interpretation of the term 'directly' in the exemption notification. The Revenue argued that without evidence of students securing employment or self-employment post-training, the appellant could not claim exemption. However, the Tribunal disagreed with this interpretation, stating that the notification only required the imparting of skills enabling students to seek employment or self-employment, not proof of actual employment outcomes for all students.The Tribunal concluded that the adjudication order and the appellate order upholding it could not be sustained. Both orders were quashed, and no costs were awarded. The decision was based on the finding that the appellant's courses met the criteria for exemption under the notifications, and the denial of exemption lacked sufficient reasoning and misinterpreted the notification requirements.