2014 (12) TMI 627 - AT - Service Tax

Waiver of pre deposit - Penalty u/s 78 - Commercial training or coaching service - imparting training, licensing and conducting examination for candicates intending to fly Helicopter. - Held that - An educational qualification recognized by law will not cease to be recognized by law merely because for practicing in the field to which the qualification relates, a further examination held by a body regulating that field of practice is to be taken. Immediate instance can be given of the qualification in the field of law. Though by amendment of the recent years, the right to practice law on the basis of the said qualification has been made subject to clearing/passing a Bar Exam to be held by the Bar Council of India, the same does not make the qualification of law not recognized by law. The recognition accorded by the Act, Rules and CAR supra to the Course Completion Certificate issued by the Institutes as the petitioner cannot be withered away or ignored merely because the same does not automatically allow the holder of such qualification to certify the repair, maintenance or airworthiness of an aircraft and for which authorization a further examination to be conducted by the DGCA has to be passed/cleared. Decision of the Hon ble High Court of Delhi is clearly applicable to the facts of this case. - Following decision of Indian Institute of Aircraft Engineering 2013 (5) TMI 592 - DELHI HIGH COURT - Stay granted.

Summary

Issues:
1. Liability to pay service tax under the category of commercial training or coaching service
2. Exclusion from the definition of commercial training or coaching center
3. Applicability of exemption notification for vocational training institutes

Analysis:
1. The appellant, engaged in flying training, licensing, and examination services, was asked to pay service tax under commercial training or coaching service category. The appellant argued exclusion based on DGCA recognition and certificates issued. The impugned order demanded a substantial amount as service tax, interest, and penalties.

2. The definition of 'commercial training or coaching' and 'commercial training or coaching center' under the Finance Act, 1994 was crucial. The exclusion clause exempts institutes issuing certificates recognized by law. The appellant relied on a case precedent where the High Court clarified the distinction between qualification and licensing, supporting the recognition of qualifications issued by the appellant.

3. The High Court's decision was deemed applicable to the appellant's case, leading to a waiver of predeposit and granting a stay against recovery during the appeal. The Tribunal's decision in a similar case further supported the appellant's position. The recognition of qualifications by the DGCA and the nature of the training provided played a pivotal role in determining the exemption from service tax liability.

This detailed analysis of the judgment showcases the legal intricacies involved in determining the liability for service tax under commercial training or coaching services and the significance of recognized qualifications in such cases.