[Indian Institute of Aircraft Enginering v. UoI (2013) 30 STR 689 (Del.)]

Commercial Training or coaching

The petitioner, an Aircraft Maintenance Engineering (AME) Training School provided AME training. The school and the course were approved by the DGCA under the Aircraft Act / Rules and the Civil Aviation Requirements (CAR) issued by the DGCA under the Aircraft Rules. The candidates completing the course were by law required to be issued a ‘course completion certificates’ in an approved format of DGCA. However, the candidates were required to pass an examination conducted by DGCA to render services of aircraft repair and maintenance whether or not they took training from an AME training school. Training centres and establishments issuing a ‘certificate’ / degree / diploma / educational qualification ‘recognized by law’ were excluded from the ambit of service tax upto 30.4.2011 and w.e.f. 1.5.2011, training / coaching leading to grant of a ‘certificate’ / degree / diploma / educational qualification ‘recognized by law’ was exempt. In a writ, the High Court held that the ‘course completion certificate’ issued by the petitioner school was ‘recognized by law’ and therefore the petitioner school is excluded from the ambit of service tax upto 30.4.11 and the AME training lead to the grant of a ‘certificate recognized by law’ and therefore exempt w.e.f. 1.5.2011 in view of the following –

(i)the expression ‘recognized by law’ is a wide expression and even if a certificate is not a product of a statute but has some kind of approval in the law it would be considered as ‘recognized by law’. Having regard to the Aircraft Act / Rules / CAR the High Court held that ‘course completion certificate’ issued by the petitioner was a ‘certificate recognized by law’.

(ii)The mere fact that the candidates completing the course are required to clear an examination conducted by DGCA to obtain a licence to render aircraft maintenance services would not make the ‘course completion certificate’ anytheless ‘recognized by law’.