2015 (2) TMI 140 - AT - Service Tax

Composite service tax demand - assessee had conducted training programmes to impart and promote Advancement and diffusion of knowledge in the field of Aerospace, Aviation Science, Aircraft engineering, technology and evaluation of Aeronautical Profession - Held that - Delhi High Court in Indian Institute of Aircraft Engineering v. Union of India reported in 2013 (5) TMI 592 - DELHI HIGH COURT has 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. In the light of this decision, the liability of the petitioner assessed by the main adjudication order, as confirmed by the Commissioner (Appeals), is to that extent unsustainable and is declared inoperative. The service tax due and assessable on the consideration received towards fees on the appellant providing a study centre for the Janaardan Rai Nagar Rajasthan Vidapeeth, Udaipur, Rajasthan, is however taxable as commercial coaching or training service, but has not been separately determined. We therefore remit the matter to the Additional Commissioner, Central Excise, Bhopal for computation of the tax liability on the consideration received on operation of the study centre. - Decided partly in favour of assessee.

Summary

Issues:
1. Rejection of appeal against adjudication order confirming Service Tax demand.
2. Allegation of conducting training programs and collecting fees.
3. Applicability of service tax on training programs.
4. Liability of service tax on providing a study center for a university.
5. Remittance of matter for computation of tax liability on study center operation.

The judgment addresses the rejection of the appeal by the Commissioner (Appeals) against the adjudication order confirming a Service Tax demand of &8377; 14,60,391/-, along with interest and penalties, imposed by the Additional Commissioner, Central Excise, Bhopal. The proceedings were initiated based on a show cause notice alleging that the appellant conducted training programs in Aerospace, Aviation Science, and other fields, collecting fees from students, which were considered taxable services. Additionally, the appellant operated as a study center for a university, collecting fees for providing courses, but the tax liability for these activities was not separately computed in the orders.

The judgment refers to a decision by the Delhi High Court in a similar case, stating that aircraft maintenance engineering training approved by the DGCA and imparted by aircraft training institutes does not fall under "commercial coaching or training," and thus, is not a taxable service. Consequently, the liability of the appellant assessed by the adjudication order, confirmed by the Commissioner (Appeals), is deemed unsustainable based on this decision. However, the service tax due on the consideration received for operating a study center for a university is considered taxable under "commercial coaching or training" service, but the tax liability for this activity was not separately determined.

As a result, the Tribunal partly allows the appeal, declaring the liability assessed for training programs as inoperative in line with the Delhi High Court decision. The matter regarding the tax liability on the operation of the study center is remitted back to the Additional Commissioner, Central Excise, Bhopal for computation. The judgment concludes by stating that the appeal is allowed without costs, and the miscellaneous application is disposed of accordingly.

This comprehensive analysis of the judgment highlights the issues surrounding the rejection of the appeal, the applicability of service tax on training programs, and the liability of service tax on operating a study center for a university. The judgment provides clarity on the taxability of different activities based on legal precedents and remits the matter for further computation, ensuring a fair and just resolution in accordance with the law.