Case Law Details
Rooman Technologies Pvt Ltd Vs Principal Commissioner of Central Tax (Karnataka High Court)
Karnataka High Court held that coverage of service provided by Occasional Skill Development Course implemented by National Skill Development Corporation within the scope of Mega Exemption no. 25/2012 as amended by notification no. 13/2013 needs reconsideration and hence matter remanded back.
Facts- The petitioner has challenged the order-in-original dated 14.11.2023 and has also sought for issuance of direction observing that the services provided by petitioner No.1 are eligible for exemption from payment of service tax under Mega Exemption Notification No.25/2012-ST dated 20.06.2012 as amended by notification No.13/2013 dated 10.09.2013. The petitioner has also sought for direction and request for finding to be made to the effect that penalty and interest are not leviable.
Petitioner states that mega Exemption Notification No.25/2012 as amended by notification No.13/2013 provides for exemption in case of services provided by a training partner approved by the National Skill Development Corporation or Sector Skill Council. Further, exemption is also available in case of services provided by Occasional Skill Development Course under the National Skill Certification and Monetary Reward Scheme or other scheme implemented by the National Skill Development Corporation.
Conclusion- Held that exemption would be available as long as it falls within the criteria mentioned at Sl.No.9A is a matter for re-consideration by the authority afresh. The finding at paragraph No.59 can be re-looked into in light of the contention that exemption can be extended if it falls within the criteria of Sl.No.9A and reference to other contemporary schemes will not be necessary.
Further held that submission of the petitioners that even in the absence of such maintenance of separate accounts if it could be demonstrated, that the components of input services used in dutiable goods can be segregated from input services as regards exempted service, then the benefit of exemption to such extent would still be extended. Such contention also requires consideration at the hands of the authority and in light of matter being remanded, said contention is also kept open with the direction for reconsideration of the finding recorded.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
The petitioner has challenged the order-in-original at Annexure-‘A’ dated 14.11.2023 and has also sought for issuance of direction observing that the services provided by petitioner No.1 are eligible for exemption from payment of service tax under Mega Exemption Notification No.25/2012-ST dated 20.06.2012 as amended by notification No.13/2013 dated 10.09.2013 enclosed at Annexure-‘T’. The petitioner has sought for certain directions as well. The petitioner has also sought for direction and request for finding to be made to the effect that penalty and interest are not leviable.
2. Learned Senior Counsel Sri. G. Shivadass appearing for the petitioners submits that apart from the contentions on merits, matter could be remanded for fresh consideration in light of the contention that many of the documents placed have not been looked into in proper perspective resulting in rejection of benefit available under Mega Exemption Notification No.25/2012 as well as amended by notification No.13/2013.
3. It is submitted that the finding made under the head of II, III and VI in the impugned order are matters that require reconsideration and the petitioner would be in a position to demonstrate before the authority that the said findings required to be re-considered and if the matter is relegated, all contentions may be kept open and set back.
4. Learned counsel for the revenue submits that matter is also appealable.
5. Heard learned Senior Counsel on behalf of the petitioner and learned counsel appearing for the respondent.
6. It must be noticed that learned Senior Counsel appearing for the petitioner has specifically stated that the exemption under the Mega Exemption Notification No.25/2012 as amended by notification No.13/2013 provides for exemption in case of services provided by a training partner approved by the National Skill Development Corporation or Sector Skill Council.
7. It is further submitted that exemption is also available in case of services provided by Occasional Skill Development Course under the National Skill Certification and Monetary Reward Scheme or other scheme implemented by the National Skill Development Corporation. It is further submitted that though element for exemption has been granted insofar as some of the activities, however there has been rejection for others as referred to in paragraph No.65.
8. It is submitted that though there is a finding at paragraph No.66 by the authority that case for exemption is not made out, however, if the matter is sent back, petitioner would make out the case for effective appreciation of the agreements. The submission that the each of the agreements have been given which are bulky and required to be placed before the authority and explained so as to avail benefit of exemption is the contention that required acceptance as it is pointed out that documentation is bulky and the elements of exemption under the Mega Notification can be pointed out effectively if an opportunity is granted.
9. Insofar as the finding at II relating to non payment / short payment of service tax on retail training income received on Government schemes, it is submitted that observation made at paragraph No.57 and a finding at paragraph No.59 requires reconsideration. It is submitted that the exemption can be traced back to the condition pointed out in the Mega Notification at Sl.No.9A and in the impugned order passed, other factors including contemporary schemes as referred to which are taken note of, has prejudiced the case of the petitioner.
10. Sl.No.9A of the Mega Exemption Notification referred to above reads as follows:
“9A. Any services provided by,_
(i) the National Skill Development Corporation set up by the Government of India;
(ii) A Sector Skill Council approved by the National Skill Development Corporation;
(iii) an assessment agency approved by the Sector Skill Council or the National Skill Development Corporation;
(iv) a training partner approved by the National Skill Development Corporation or the Section Skill Council in relation to the (a) National Skill Development Programme implemented by the National Skill Development Corporation; or
(b) a vocational skill development course under the National Skill Certification and Monetary Reward Scheme; or
(c) any other Scheme implemented by the National Skill Development Corporation.”
11. The contention that exemption would be available as long as it falls within the criteria mentioned at Sl.No.9A is a matter for re-consideration by the authority afresh. The finding at paragraph No.59 can be re-looked into in light of the contention that exemption can be extended if it falls within the criteria of Sl.No.9A and reference to other contemporary schemes will not be necessary.
12. Insofar as the finding at VI as regards demand under Rule 6 clause (3) of the Cenvat Credit Rules, 2004, it is submitted that as regards total Cenvat availed of Rs.32,16,333/-, demand of Rs.5,95,71,157/- has been raised on the premise of non-maintenance of separate accounts where assessee is seeking availment of Cenvat Credit on both dutiable as well as exempted service.
13. Learned Senior Counsel appearing for the petitioners submits that even in the absence of such maintenance of separate accounts if it could be demonstrated, that the components of input services used in dutiable goods can be segregated from input services as regards exempted service, then the benefit of exemption to such extent would still be extended.
14.Such contention also requires consideration at the hands of the authority and in light of matter being remanded, said contention is also kept open with the direction for reconsideration of the finding recorded.
15. Accordingly, the order at Annexure-‘A’ is set aside insofar as adverse findings recorded as against the petitioner. Though some of the adverse findings has been dealt with and specifically referred to above, it is stated that there are few other small adverse contentions regarding which may be kept open for consideration before the concerned authority. Said submission is taken note of in the affirmative.
16. Accordingly, the order at Annexure-‘A’ insofar as the adverse findings recorded as against the petitioner are set aside. All contentions are kept open. The authority is at liberty to reconsider the matter afresh in light of the discussion made above.
17. The petitioner to appear before the sole respondent within one month from the date of receipt of certified copy of this order. Needless to state, petitioner is to cooperate in expeditious disposal of the proceedings upon remand.
Accordingly, petition is disposed off.
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