2013 (11) TMI 1500 - AT - Service Tax

Waiver of pre-deposit of Service Tax - Commercial Training and Coaching Services - Exemption under Notification No.24/04-ST dated 10.09.2004 - Vocational training institute - aircraft maintenance engineer approved by D.G.C.A - Held that - Applicant have been issuing certificates after completion of necessary training at their institute to candidates enrolled with them and the said certificate has been approved by the D.G.C.A. and qualify the candidates to sit for an examination conducted by DGCA to make them eligible to take employment as an aircraft maintenance engineer. We find that in denying the said benefit to the Applicant the reasoning of Ld. Adjudicating Authority that since the certificate issued by the Applicant would not directly entitle a candidate to seek employment or undertake self-employment, hence their institute could not be called as vocational institute - prima facie to qualify as vocational training institute, it is not necessary that the certificate issued to the candidate should lead directly to employment or self-employment. In these circumstances the Applicant could able to make out a prima facie case for total waiver of pre-deposit of dues adjudged. Accordingly all dues adjudged are waived and recovery thereof stayed during pendency of the Appeal - Following decision of M/s Indian Institute of Aircraft Engineering Versus Union of India & Ors 2013 (5) TMI 592 - DELHI HIGH COURT - Stay granted.

Summary

Issues Involved:
Application for waiver of pre-deposit of Service Tax and penalties under various provisions of Finance Act, 1994 based on the classification of services provided by the institute as exempted vocational training under Notification No.24/04-ST.

Analysis:

Issue 1: Classification of services as exempted vocational training
The Applicant sought waiver of pre-deposit of Service Tax and penalties, arguing that their training services fall under the exempted category of vocational training institute as per Notification No.24/04-ST. The Ld. Advocate contended that the institute's training, leading to certificates approved by D.G.C.A., qualifies candidates for an examination essential for employment as aircraft maintenance engineers. The adjudicating authority denied the benefit, stating the certificates do not directly enable employment. However, the Ld. Advocate referenced a Delhi High Court judgment, emphasizing that the absence of direct employment linkage does not disqualify training as vocational. The Tribunal concurred, citing the High Court's view that qualification recognition does not hinge on immediate employability, as seen in the legal field. Consequently, the Tribunal found the institute's case prima facie eligible for waiver, aligning with the vocational training criteria. As a result, the Applicant's pre-deposit dues were waived, with recovery stayed pending appeal.

This judgment clarifies the interpretation of vocational training criteria under Notification No.24/04-ST, emphasizing that direct employment linkage is not a prerequisite for classification as a vocational training institute. The decision aligns with the Delhi High Court's stance on qualification recognition and employment requirements, setting a precedent for similar cases.