M/s. Inlingua International School. of Languages Vs. Commissioner of Service Tax (CESTAT Delhi)
CESTAT Delhi held that imparting training in English, French, German, Spanish language by the appellant are entitled for exemption under notification No. 9/2003 ST dated 20.6.03 and notification No. 24/2004 dated 10.9.2004. Therefore the appellant is not liable to pay service tax.
FULL TEXT OF THE CESTAT ORDER IS AS FOLLOWS:-
The appellant is in appeal against the impugned order demanding service tax under the category of commercial coaching and training service.
2. After hearing both the parties, a short issue arose before us is whether the foreign language training institute imparting training and coaching in English, Spanish, French and German, are eligible for exemption under Notification No. 9/2003-ST dated 20.06.2003 and Notification No. 24/2004-ST dated 10.09.2004 or are taxable under the category of commercial training and coaching service or not.
3. Heard the parties and considered the submissions.
4. After considering the fact that the said issue has been examined by this Tribunal in the case of M/s. British School of Language, New Delhi vs. CST, Delhi Final Order No. 52546/2017 dated 22.3.2017 wherein this Tribunal relying on the decision of M/s. Alliance Francaise De Delhi vs. CST, Delhi [2017 (3) TMI 119 –CESTAT, New Delhi ] held that imparting training in foreign language will make the institute vocational training institute. Therefore, they are entitled for exemption under Notification No. 24/2004 ST dated 10.9.2004. We further find that in the case of M/s. Alliance Francaise, this Tribunal has observed as under:
“8. Regarding the tax liability of the appellant under Commercial training or coaching service, we note that they are specialized agency conducting French Language classes for a long time in India. Admittedly, French is one of the influential language in the world, being an official Language in 41 countries. Ability to speak French will certainly provide job opportunity in various sectors like hospitality, tourism, corporate connected to French speaking countries etc. The original authority upheld the tax liability with a simple reasoning that learning of French may only enhance the qualification of the trainees. He concluded that the same does not qualify as vocational training as defined in the Notification. We find we are not in agreement with such simplistic reasoning. The Original Authority listed the various objectives of leaning French. We have also perused the said list. Many respondents have clearly mentioned that they are learning French to get work in France or French speaking country or French Company or tourism or hotel industry or diplomatic service or international organization. The appellant did submit various affidavits/ letters from various employers which illustrate that learning French from the appellant leads to the employment directly attributable to the training imparted by them. We note these illustrative examples only corroborate our conclusion that French learning as imparted by the appellant can be categorized as vocational training. From the objectives as listed in the impugned order, we note a few of the participants did indicate recreational reason for learning French. I n any case, whether all participants do get employment or become self employed is not the test to determine the vocational nature of the training. We note that learning with some proficiency, a language which is not commonly spoken in a country, certainly provides employment opportunities or chance for self employment, if the said language is imparted for such potential. Incidentally, we note that the service tax demand sought to be confirmed of translation fee itself supports the case of the appellant that translation is one of the gainful employment that can be availed by the trainee of the institute. Accordingly, we find that the exemption claimed by the appellant is available to them and the reasoning for rejecting the claim as recorded in the original order is not sustainable. I n this connection we also referred to the decision of the Tribunal in Darshan English Classes 2015 (39) STR 169 (Tri. Amd.).”
5. As the issue has already attained finality holding that imparting training in English, French, German, Spanish language by the appellant are entitled for exemption under notification No. 9/2003 ST dated 20.6.03 and notification No. 24/2004 dated 10.9.2004. Therefore the appellant is not liable to pay service tax.
6. We further take note of the fact that initially the appellant has registered and paid the service tax. But the Joint Commissioner vide order dated 5.10.2005 has observed that the activity undertaken by the appellant is not taxable. Therefore, we hold that extended period of limitation is not invokable. Admittedly whole demand is not beyond the period of limitation, therefore, we hold that the demands are barred by limitation.
7. In view of the above analysis, the appeal is allowed with consequential relief, if any.
(dictated and pronounced in the open court )