2014 (7) TMI 364 - AT - Service Tax

Waiver of pre deposit - Demand of service tax - Service of imparting flying training - appellant impart training to the students in take off, landing, flying, handling aircrafts and ground examinations and prepare them for the examination conducted by the DGCA for the issue of private pilot licence, commercial pilot license etc - Held that - Prima facie of the view that appellant are covered by the definition of commercial training or coaching centre under Section 65 (27). We find that same prima facie has been taken by the Bombay Bench in the case of Bombay Flying Club Vs CST Mumbai (2012 (7) TMI 669 - CESTAT, MUMBAI). As regards the Board s Circular No. 164/15/2012-ST dt. 28.8.2012, the same is in respect of the provisions of Section 66D of the Finance Act, 1994 which were not there during the period of dispute. Thus so far as the demand of service tax on the appellant s activity of providing flying training to the students is concerned, the appellant have not been able to establish prima facie case in their favour. Appellant have provided repair and maintenance service in respect of the aircrafts of the Govt of Tamil Nadu, and they have also provided airport service to the Govt of Tamil Nadu by making available their hangars for parking of the aircrafts and helicopters of the State Government against rental, these activities are not denied by the appellant and we are prima facie of the view that the amount received for the services would attract service tax. - stay granted partly.

Summary

Issues:
1. Whether the activities of the appellant in imparting flying training and issuing certificates are covered under "commercial coaching or training service" attracting service tax.
2. Whether the repair and maintenance services provided by the appellant for aircrafts of the Government of Tamil Nadu are taxable.
3. Whether the rental income received for providing hangars for parking aircrafts and helicopters of the Government of Tamil Nadu is taxable under the category of "Airport Service."

Analysis:

Issue 1:
The main contention revolves around whether the appellant's flying training activities fall under the purview of "commercial coaching or training service" attracting service tax. The appellant argued that they are not a "commercial coaching or training center" as defined under Section 65 (27) of the Finance Act, 1994, since the training leads to the issuance of licenses recognized by law. However, the Tribunal found that the completion certificates issued by the appellant do not hold legal recognition, unlike the pilot licenses issued by the DGCA. Consequently, the Tribunal held that the appellant's activities are covered by the definition of "commercial training or coaching center," and they failed to establish a prima facie case against the service tax demand.

Issue 2:
Regarding the repair and maintenance services provided by the appellant for the aircrafts of the Government of Tamil Nadu, the Tribunal noted that the appellant did not dispute these activities. As a result, the Tribunal held that the amount received for these services would attract service tax, indicating that the repair and maintenance services are indeed taxable.

Issue 3:
The rental income received by the appellant for providing hangars for parking aircrafts and helicopters of the Government of Tamil Nadu was also deemed taxable under the category of "Airport Service." The Tribunal found that the appellant did not contest these activities, leading to the conclusion that the rental income is subject to service tax.

In conclusion, the Tribunal directed the appellant to deposit a specified amount within a given timeframe, failing which the predeposit requirement for the remaining service tax demand, interest, and penalty would stand, with recovery stayed during the appeal's pendency. This decision was made based on the Tribunal's assessment that the appellant had not established a prima facie case in their favor across the various issues raised in the appeal.