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TMI Blog2025 (3) TMI 1139X X X X Extracts X X X X X X X X Extracts X X X X ..... registered as a non-profitable organisation. RespondentST/ Department viewed its activity undertaken between October, 2003 and September, 2008 as "Commercial Coaching and Training Services" as well as "Management, Maintenance and Repair services" respectively. Accordingly Service Tax demand of Rs.1,05,73,964/- was made through show-cause notice dated 20.04.2008 by holding the said training as commercial training and coaching services taxable in terms of Section 65(105)(zzc) of the Finance Act, 1994 read with Clause 26 of Section 65 of the said Act and also for services of "maintenance or repair" classifiable under Section 65(64) of the said Act by invoking extended period with proposal for interest and equal penalty. Periodic showcause notices were also issued to the Appellant for October, 2008 to March, 2009 demanding Service Tax of Rs.33,88,916/-, for financial year 2009-10 with Service Tax demand of Rs.58,80,527/- and for financial year 2010-11 with Service Tax demand of Rs.57,62,275/. Learned Commissioner of GST & Central Excise (Appeals-III), Mumbai disposed of these four demands made vide show-cause notice as referred above and subsequent notices dated 20.04.2008, 22.04.2010, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h no taxable service is held to be provided. He informed that Appellant was providing 'proof of competency' certificate as provided under Rule, 41 of the Aircraft Rules, 1937 which was a rule framed under Section 5 of the Aircraft Act, 1934 that authorised the Central Government to make such Rules. He further informed that Rule, 133B of the Aircraft Rule, 1937 deals with approved organisation i.e. organisation approved by DGCA and Training Schools and Organisations of Appellant's category are covered under the said Rule, for which Appellant's case is covered within the definition of Section 65(27) of the Finance Act, 1994 that reads as hereunder: "(27) "Commercial training or coaching centre" means any institute or establishment providing commercial training or coaching for imparting skill or knowledge or lessons on any subject or field other than the sports, with or without issuance of a certificate and includes coaching or tutorial classes ["but does not include preschool coaching and training centre or any institute or establishment which issues any certificate or diploma or degree or any educational qualification recognised by law for the time being in force;" {omitted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commercial training and coaching' submitted that aircraft maintenance engineering license is issued by DGCA after conducting necessary examination for which Assessee-Appellant M/s. Bombay Flying Club can be stated to have been issuing certificates only in respect of a particular Batch completing training, duly approved by DGCA which can not be treated as certificate issued is recognized by law since the same only enables individual candidate to obtain requisite licence from DGCA and therefore, the order passed by learned Commissioner (Appeals) in dropping the demand for the subsequent period for 2011-12 is unsustainable in law. He further submitted that Appellant having registered under Companies Act is also liable to pay Service Tax on "maintenance and repair" charges received by it, for which the appeal filed by Assessee-Appellant M/s. Bombay Flying Club is required to be set aside. He summed up his submission in saying that only because Revenue-Department had withdrawn its appeal on monetary ground against the order passed by Hon'ble Delhi High Court in Indian Institution of Aircraft Engineering judgment that resulted in vacation of stay, it can't be said that the principle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng and Aircraft Maintenance Engineering Institutes are approved institute of the DGCA who were imparting training as per Rule, 133B of the Aircraft Rules, 1937 and were issuing certificates that was considered by DGCA for issue of respective licences since such training is mandatory without successful completion of which no candidate can obtain Pilot licence or maintenance engineering certificate, as the case may be. This aspect has been disputed by the Department and concurred by the order of Adjudicating Authority while disposing of first four show-cause notices on the ground that those certificates can't be considered as 'recognized by law' since were not alone sufficient to award a degree or diploma as 'recognized by law' and therefore, the same certificate, since can't grant any engagement directly to the Candidates/Trainees, it can't be considered as vocational or educational training certificate. Infect this aspect has been considered by Hon'ble Bombay High Court and the finding rendered by it is noted in para 27 of their order which is reproduced hereunder for better clarity. "27. The reasoning in the impugned Instruction dated 11th May, 2011 that because the qualific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in 2018 (15) GSTL 342 and also by Hon'ble Allahabad High Court in the case of Garg Aviations Ltd. reported in 2014 (35) STR 689 on the issue has to be followed by parallel or subordinate judicial forums. We accordingly are of the view that the certificate issued by Appellant can be treated as certificate 'issued in accordance to law' so as to cover it under exception clause of imparting commercial and educational training. The portion of statute regarding issue of certificate that was deleted from Section 65(27) with effect from 01/05/2011 was brought into force by way of its introduction through Notification No. 33/2011-ST, that covers the period of the order passed by the Commissioner (Appeals), also would meet the same result. 10. Now coming to the tax liability that is fastened on maintenance and repairing of aircrafts by the Appellant company, as could be seen from the documents available on record, no separate charge except repairing cost in the name of 'overhauling charges' was collected for those repairing and maintenance services and the said services were rendered only to the members of M/s. Bombay Flying Club, which is Appellant in the present case and therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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