2013 38 taxmann.com 145 (New Delhi – CESTAT) Gargi Consultants (P.) Ltd. vs. CCE, Allahabad

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Whether extended period is invokable if decision of Tribunal during the relevant period is in favour of the assessee but is subsequently reversed by the Hon’ble Supreme Court? Held, No.

Facts:
The appellant was engaged in providing “computer training” services during FY 2004-05 and was registered under the category of “Commercial Coaching & Training” service. Show-cause was issued demanding service tax on the ground that during the period July 2004 to March 2005 it has provided “computer training” and has not discharged service tax liability on the same. Appellant contended that that during the relevant period, all the decisions of the Tribunal were in its favour. Appellant also contended that the ‘computer training’ was vocational training and therefore exempt vide notification 9/2003-S.T. 12-06-2003 read with subsequent notification No. 24/2004-ST dated 10- 09-2004. Further it stated that the exemption in relation to ‘computer training’ was withdrawn vide notification 16-06-2005 and thus the same cannot have retrospective effect.

Held:
The Tribunal held that, although the issue on merits was no longer res integra, during the relevant period as Hon’ble Supreme Court in the case of Sunwin (supra) held during the period from 10-09-2004 to 15-06-2005, an assessee providing “computer training” services was required to pay service tax in as much as the subsequent notification effective from 16-06-2005 was only a clarificatory notification and was effective retrospectively. The Tribunal further held as such, there was a bona fide belief on the part of the appellant not to pay service tax on the “computer training services” on the basis of decisions being in its favour at that point of time. Thus, in the instant case, there was a bona fide belief on the part of the appellant and hence invocation of extended period was not justifiable.