2015 (1) TMI 36 - AT - Service Tax

Waiver of pre deposit - Commercial training or coaching servie - Held that - Prima facie, the appellant conducted recognized courses by D.G.C.A. and issued degree or certificate to the qualified students. Therefore, on merits, appellants have a good case. Even though learned Authorised Representative took us through some paragraphs of the adjudication order wherein the Commissioner has given a finding that courses conducted by appellant are not covered by exemption but in fact, the courses conducted by appellant are covered by the definition. There are no specific finding based on records or investigation or documents to come to the above conclusion. Needless to say that it requires further detailed examination of documents, nature of courses conducted by appellant and certificate/degree issued by them etc. and that can be done only at the time of final hearing. At this stage, based on the case made out on merits and the decisions cited by appellant, we consider it appropriate that the requirement of pre-deposit has to be waived. Accordingly, there shall be waiver of pre-deposit and stay against recovery during pendency of the appeal. - Stay granted.

Summary

Issues:
- Liability to pay service tax under the category of "Commercial training or coaching."
- Grounds for stay of pre-deposit based on financial hardship, government revenue security, and merits of the case.

Liability to pay service tax under the category of "Commercial training or coaching":
The judgment involved a case where the appellant was held liable to pay service tax under the category of "Commercial training or coaching." The appellant, a public society funded by the Government of Andhra Pradesh, provided instruction in flying and aircraft maintenance engineering. The appellant also offered recognized B.Sc. (Aviation) and M.Sc. (Aviation) courses in collaboration with universities, which were deemed outside the scope of service tax. The institute was recognized by the Directorate General of Civil Aviation (DGCA). The appellant argued that it was excluded from the taxable category due to providing recognized education and courses, including DGCA-approved training. The Delhi High Court's decision in a related case was cited to support the appellant's position.

Grounds for stay of pre-deposit:
The appellant sought a stay of pre-deposit based on financial hardship, government revenue security, and the merits of the case. The appellant faced financial difficulties due to a fire accident that destroyed its aircraft and properties, causing significant financial losses. The appellant contended that pre-deposit would impose severe and undue hardship given the circumstances. Additionally, the appellant's status as a society fully funded by the government ensured the security of any dues pending the final decision. The appellant emphasized the merits of its case, highlighting the recognized education provided and the certificates issued to students. The Bombay High Court's decision granting waiver of pre-deposit in a similar case was referenced to support the appellant's argument for a stay against recovery during the appeal process.

In the judgment, the appellate tribunal considered the appellant's case on merits, noting that the courses conducted were recognized by the DGCA, and certificates were issued to qualified students. The tribunal found that the appellant had a strong case based on the recognized courses and certificates issued. The tribunal observed that the Commissioner's finding regarding exemption lacked specific evidence and required further detailed examination during the final hearing. Therefore, the tribunal waived the requirement of pre-deposit and granted a stay against recovery pending the appeal process.