Computer training not exempt from service tax during the period 10th Sept 2004 to 15th June 2005 – SC

The notification dt . 10th of September, 2004 was issued and made effective from the date of its issuance. The same did not include the concept of “computer training institute” within its ambit and under the aforesaid notification, exemption was only granted to vocational and recreational training institute. A computer training institute which is defined and was included in the notification date 20th June, 2003 was specifically excluded from the purview of the notification dt. 10th Sept., 2004. The Central Government while doing so was fully conscious of the implication thereof and also of the fact as to what constitutes a computer training institute as defined in the notification date 20th June, 2003.

Therefore, in our considered opinion, the Central Government was fully conscious of the fact that the said computer training institute should not get the exemption and intended the same to be shown by specifically excluding the same from the purview of the notification dt. 10th Sept., 2004. The notification was also in operation from the date of its issuance, i.e., from 10th Sept., 2004 to 15th June, 2005 without there being any other intendment.

So far as the contention of the learned counsel for the respondent in respect of the contents of the notification dt.7th June, 2005 is concerned, in our considered opinion 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 16th June, 2005. The Government thought it fit to make it abundantly clear by issuing the said notification. The liability, so far as the respondent is concerned, to pay the service-tax between the period 10th Sept., 2004 to 15th June, 2005, therefore subsisted.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 8084 of 2010

COMMISSIONER OF CENTRAL EXCISE

Vs

SUNWIN TECHNO SOLUTION (P) LTD.

Dr Mukundakam Sharma and Anil R Dave, JJ

Dated: September 13, 2010

JUDGEMENT

Per: By the Court:

Having heard learned counsel appearing for the parties and for the reasons stated in the application, the delay in filing the special leave petition is condoned. Application for con donation of delay stands disposed of.

2. Leave granted.

3. By filing the present appeal, the appellant has challenged the judgment and order dt . 6th April, 2009 passed by the Jharkhand High Court affirming the decision and the order passed by the CESTAT, Kolkata holding that in view of issuance of the notification dt. 7th June, 2005 which has come into effect from 16th of June, 2005 service-tax would not be payable by computer training institute like the respondent herein for the period from 10th Sept., 2004 to 15th June, 2005.

4. Counsel appearing for the parties have taken us through the records and on perusal thereof, we find that the earliest notification, which is placed on record before us, was issued by the competent authority on 20th of June, 2003. By the said notification certain institutes imparting a special kind of training were exempted from payment of service-tax. The aforesaid exemption was granted in exercise of the powers conferred under s. 93 of the Finance Act, 1994 (32 of 1994) (in short, “the Act”). A bare perusal of the said notification would indicate that by issuing the said notification the Central Government intended to exempt the taxable services in relation to commercial training or coaching imparted by (a) vocational training institute; (b) a computer training institute; and (c) a recreational training institute. In the said notification as to what is a vocational training institute and what is a computer training institute and also as to what is a recreational training institute have been defined under the Explanation incorporated in the said notification. When we look into the aforesaid definitions given to the expression “vocational training institute”, “computer training institute” and “recreational training institute”, we find that each one of them constitutes a particular type of coaching center imparting specific training mentioned against each one of them and they are of different nature and each one of them is distinguishable from the other. The aforesaid notification came into force on 1st day of July, 2003 and remained in force till 29th day of February, 2004.

5. Thereafter another notification came to be issued by the Government of India. The said notification was a fresh notification whereby the Central Government exempted the taxable services provided by commercial training or coaching by a vocational training or a recreational training institute. In the said notification an Explanation was appended wherein only the definition of “vocational training institute” and “recreational training institute” are given and the definition of “computer training institute” was specifically excluded therefrom. A comparative study of the two notifications shows that the same definition of “vocational training institute” and recreational training institute” as given under the notification date 20th June, 2003 has also been given in the notification date 10th Sept., 2004. It is needless to state that it is apparent on the face of the reading of the notification date10th Sept., 2004 that 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.

6. Subsequent thereto another notification date 7th June, 2005 came to be issued. The said notification also was issued in exercise of the powers conferred under s. 93 of the Act. By issuing the said notification, the Central Government amended the notification date 10th Sept., 2004 by incorporating a proviso thereto, which reads as follows :

It is also stated in para 2 of the said notification that the aforesaid notification would come into force on the 16th day of June, 2005.

7. Counsel appearing for the respondent has submitted that by inserting the aforesaid proviso in the notification dt . 10th Sept., 2004 effective from 16th day of June, 2005, the Central Government intended that so far as computer training institute is concerned, they would also stand exempted and their liability to pay such service-tax arises with effect only from 16th day of June, 2005 and not prior to that date.

8. We have considered the said submission. The notification date 10th of September, 2004 was issued and made effective from the date of its issuance. The same did not include the concept of “computer training institute” within its ambit and under the aforesaid notification, exemption was only granted to vocational and recreational training institute. A computer training institute which is defined and was included in the notification date 20th June, 2003 was specifically excluded from the purview of the notification date 10th Sept., 2004. The Central Government while doing so was fully conscious of the implication thereof and also of the fact as to what constitutes a computer training institute as defined in the notification date 20th June, 2003.

9. Therefore, in our considered opinion, the Central Government was fully conscious of the fact that the said computer training institute should not get the exemption and intended the same to be shown by specifically excluding the same from the purview of the notification date 10th Sept., 2004. The notification was also in operation from the date of its issuance, i.e., from 10th Sept., 2004 to 15th June, 2005 without there being any other intendment.

10. So far as the contention of the learned counsel for the respondent in respect of the contents of the notification date 7th June, 2005 is concerned, in our considered opinion 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 16th June, 2005. The Government thought it fit to make it abundantly clear by issuing the said notification. The liability, so far as the respondent is concerned, to pay the service tax between the period 10th Sept., 2004 to 15th June, 2005, therefore subsisted.

11. In terms thereof, we dispose of this appeal by allowing the same to the aforesaid extent but leaving the parties to bear their own costs.

NF