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2024 (8) TMI 784 - AT - Service TaxLevy of service tax - fee receipt and job training - HELD THAT - The appellant placed reliance upon the decision of the Delhi High Court in M/S INDIAN INSTITUTE OF AIRCRAFT ENGINEERING VERSUS UNION OF INDIA ORS 2013 (5) TMI 592 - DELHI HIGH COURT and the decision of the Tribunal in HINDUSTAN INSTITUTE OF AERONAUTICS VERSUS COMMR. OF C. EX., BHOPAL 2015 (2) TMI 140 - CESTAT NEW DELHI in the own case of the appellant where it was 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.' The Assistant Commissioner and the Commissioner (Appeals) were therefore, 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. 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 dated 11.01.2017 passed by the Commissioner (Appeals) - It is, accordingly, set aside and the appeal is allowed.
Issues:
1. Quashing of the order confirming service tax demand with interest and penalty. 2. Interpretation of service tax liability on training and job training fees. 3. Reliance on Delhi High Court and Tribunal decisions. 4. Consideration of Advanced Ruling Authority's views. 5. Legality of orders by Assistant Commissioner and Commissioner (Appeals). 6. Compliance with Tribunal and Delhi High Court orders. Analysis: The judgment involves the appeal by M/s Hindustan Institute of Aeronautics seeking to quash the order confirming the demand of service tax with interest and penalty. The appellant provided training to students for the examination conducted by the Director General of Civil Aviation and issued certificates after completion of the training. Two show cause notices were issued to the appellant, alleging liability to pay service tax on fee receipts and job training. The Assistant Commissioner confirmed the service tax demand despite the appellant's reliance on the Delhi High Court and Tribunal decisions in their favor. The Assistant Commissioner's decision was based on the fact that the appellant was providing training for DGCA examination and charging fees, making them liable for service tax. The Commissioner (Appeals) upheld this decision, leading the appellant to challenge the legality of the orders. The appellant argued that the authorities erred in not following the Tribunal's order and the Delhi High Court's judgment, which declared that certain training activities were not subject to service tax. The appellant highlighted the Tribunal's order in their own case, emphasizing that the training provided did not fall under taxable services as per the Delhi High Court's decision. The Tribunal's order remitted the matter for computation of tax liability on specific activities, indicating a nuanced approach to service tax liability. The appellant contended that the authorities should have considered these precedents before confirming the service tax demand. Ultimately, the Tribunal found in favor of the appellant, setting aside the Commissioner (Appeals) order based on the Delhi High Court and Tribunal decisions. The judgment underscores the importance of adhering to legal precedents and considering the specific nature of services provided in determining service tax liability. The appellant's compliance with the law and reliance on relevant case law played a crucial role in the favorable outcome of the appeal.
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