The Customs, Excise & Service Tax Appellate Tribunal, New Delhi, held that the Aircraft Maintenance Engineering Training imparted by aircraft training institutes are not “commercial coaching or training”, therefore no service tax is payable.
The tribunal relied on the case of Indian Institute of Aircraft Engineering v. Union of India in which it was declared that aircraft maintenance engineering training, a course approved by the DGCA and imparted by aircraft Training Institutes does not fall within the ambit of “commercial coaching or training”; and no taxable service is thus provided.
Facts
M/s Hindustan Institute of Aeronautics has sought quashing of the order passed by the Commissioner (Appeals) by which the order passed by the Assistant Commissioner confirming the demand of service tax with interest and penalty has been upheld.
The appellant provided training and prepared students for examination conducted by the Director General of Civil Aviation for aircraft maintenance engineering license. After completion of the training, the appellant issued certificates to the students.
Two show cause notices were issued to the appellant alleged calling upon the appellant to pay service tax on the fee receipt and job training.
The appellant filed a reply to the show cause notice, but by order, the Assistant Commissioner confirmed the demand of service tax.
Before the Assistant Commissioner, the appellant placed reliance upon the decision of the Delhi High Court in Indian Institute of Aircraft Engineering vs. Union of India and the decision of the Tribunal in Hindustan Institute of Aeronautics Vs. Commr. Of C. Ex., Bhopal in the own case of the appellant.
The Assistant Commissioner in regard to the order passed by the Tribunal and the Delhi High Court observed that the CESTAT, in its Final Order has failed to take cognizance of the fact that the respondent are only providing the training for preparing students to take the AME examination of the DGCA and are not issuing any Certificate/Diploma/Degree at all, let alone any of these recognized by law. As they have charged fees from their students for preparation and training as per syllabus prescribed by DGCA they do not fall in the excluded category of Coaching or Training Centers, and hence are liable to Service Tax provisions including payment of Tax. The Delhi High Court judgment that has been relied upon by CESTAT in passing the instant Final Order, has not applied the correct interpretation to the wordings in the statue.
Submissions
Counsel for the Appellant submitted that the Assistant Commissioner and the Commissioner (Appeals) committed an illegality in not following the order passed by the Tribunal and, therefore, the order passed by the Commissioner (Appeals) should be set aside.
Conclusion
The tribunal observed that the Assistant Commissioner and the Commissioner (Appeals) were not justified in ignoring the order passed by the Tribunal in the own case of the appellant as also the order of the Delhi High Court in the case of the appellant.
The bench stated that in view of the decision of the Delhi High Court in Indian Institute of Aircraft Engineering and the Tribunal in Hindustan Institute of Aeronautics it is not possible to sustain the order passed by the Commissioner (Appeals).
Case Details
Case Name: M/s Hindustan Institute of Aeronautics v/s Commissioner of Central Excise & Service Tax Bhopal
Citation: Service Tax Appeal No. 50711 of 2017
Judges: Justice Dilip Gupta, President and Mr. P.V. Subba Rao, Member (Technical)
DATE OF DECISION: 07.08.2024
