2019 (2) TMI 1568 – CESTAT HYDERABAD – TMI – Commercial training and coaching service – Vocational training institute – animation coaching – Exemption from payment of service tax – N/N. 24/2004-ST dated 10.9.2004 – whether the animation coaching provided by the appellant should be treated as computer training in terms of the aforesaid notification or otherwise? – time limitation – Held that:- The appellant’s coaching is not computer animation and not any computer software or hardware. When a student passes out the course he will not become either a computer hardware or a software professional but he becomes professional in using the computer software to produce animation and animation films. This is similar to CAD software or TALLY software used by professionals in their work. In our view, the test to decide whether or not the training in question is a training related to computer hardware or software is what the trainee does at the end of his training – In this case, the trainee will
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
magnetic tape or on any other media or device and includes editing thereof in any manner. The animation film produced by the appellant clearly does not appear to be covered by this definition and therefore, we find appellant is not liable to pay service tax on this service as well.
–
Since, we have decided in favour of the appellant on merits, we do not find it necessary to examine the question on limitation – appeal allowed – decided in favor of appellant. – Appeal No.ST/1934/2010 – A/30266/2019 – Dated:- 26-2-2019 – Mr. M.V. Ravindran, Member (Judicial) And Mr. P. Venkata Subba Rao, Member (Technical) Ms Swetha, Advocate for the Appellant. Shri V.R. Pavan Kumar, Superintendent/AR for the Respondent. ORDER Per: P.V. Subba Rao. 1. This appeal is filed against Order-in-Original No. 34/2010-ST dated 07.05.2010. 2. The appellant is engaged in imparting training in various courses in the field of animation like 2D Animation, Extreme 3D, Extreme Compositing (SHAKE), Advance Training (FC
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
liable to pay service tax under commercial training and coaching services , even though the courses offered by them were vocational by nature. It was also alleged that they were also providing video tape production service and a demand of ₹ 50,77,447/- under commercial training and coaching service and an amount of ₹ 2,36,484/- under video tape production agency service were issued. After following due process the Commissioner of Customs and Central Excise, vide impugned order, confirmed the demands with interest under Sec.75 of the Finance Act, 1994. He also imposed penalty of ₹ 5,000/- under Sec.77 and penalty equal to the duty demanded under Sec.78 of the Finance Act. Aggrieved by this order, the present appeal has been filed on the following grounds: a. They are providing vocational training or coaching and hence are entitled to the benefit of exemption notification 24/2004-ST. It is evident from the brochures and prospectus the trainees join the institute to get
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
be that of accountants and designers. The production of animation movie undertaken by the appellant does not amount to video production agency service. They produced a 22 minute short length animation programme with the name Net ball in 2006-07 and sold it for consideration in terms of agreement dated 1-7-2006 to a company in New Zealand and received consideration in foreign exchange. Therefore, the same should be treated as an export of service. Further, the consideration would be covered by exemption notification which applies to small scale service providers because the rest of their services were not chargeable to service tax. If the small scale exemption is considered only an amount of ₹ 7,385/- is liable to be paid which has also been discharged with interest. In view of the above, they submitted that the production of animation movie undertaken by them is also not liable to service tax as it is an export of service. 3. On limitation, the appellant argued that they had not
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
more precisely, interpretation of provisions of Notification No. 24/2004-ST, invoking extended period of limitation is not justified and neither can penalty be imposed. 4. Lastly, he would argue that if the case is held against them, the amounts received by them should be treated as cum-tax values and service tax should be calculated accordingly. 5. Learned departmental representative reiterates the findings of the lower authority. 6. We have considered the arguments on both sides and perused the records. There is no dispute on the facts of the case that appellant is providing training and coaching in computer animation services which according to the appellant is exempted as per notification 24/2004-ST dated 10.09.2004 as amended from time to time. According to the revenue their coaching is provided in computer hardware and software and therefore, they are excluded from the benefit of this exemption notification. A related issue is the taxability of the video film which they produced
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
find employment or undertake self employment. This notification was subsequently amended vide notification 19/2005-ST dated 7.6.2005 by inserting a proviso as follows: Provided that nothing contained in this notification shall apply to the taxable services provided in relation to commercial training or coaching by a computer training institute. In explanation to the notification clause (3) has been added as follows: III) Computer training institute means computer training or coaching centre which provides coaching or training relating to computer software or hardware. 8. The point of dispute is whether the animation coaching provided by the appellant should be treated as computer training in terms of the aforesaid notification or otherwise. We find in the particular facts and circumstances of the case that the appellant s coaching is not computer animation and not any computer software or hardware. When a student passes out the course he will not become either a computer hardware or a
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
tion 19/2005-ST dated 7.6.2005. Insofar as the video tape production service is concerned, the appellant produced animation movie and sold it for a consideration. Video tape production services as per Sec. 65(119) of the Finance Act, 1994 is any professional videography or a commercial concern engaged in the business of rendering service related to video production. Video tape production means the process of recording any programme, event or function on a magnetic tape or on any other media or device and includes editing thereof in any manner. The animation film produced by the appellant clearly does not appear to be covered by this definition and therefore, we find appellant is not liable to pay service tax on this service as well. Since, we have decided in favour of the appellant on merits, we do not find it necessary to examine the question on limitation. The demand of service tax, interest and penalties are therefore liable to be set aside and we do so. 7. The impugned order is set
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =