Board Instruction No.137/132/2010-ST dated 11-05- 2011 quashed

Facts
The
appellant was an Aircraft maintenance engineering training school
approved by Director General of Civil Aviation (DGCA) for providing
Aircraft maintenance engineering (AME) training and conducting
examination wherein the course was approved by the DGCA under relevant
statutory provisions of Civil Aviation Requirement (CAR). Based on the
Board’s Instruction No. 137/132/2010- ST dated 11-05-2011, the
department raised demand. The appellant contended that they issued a
certificate approved by DGCA which fully controlled such training
institutes by prescribing syllabus, regulating number of seats per
session, manner of conduct of exam etc. and that the instruction (supra)
was in contravention of section 65(105) (zzc) read with section 65(27)
of the Act and Notification dated 25-04-2011. The respondents contended
that the appellant did not issue any certificate, degree or diploma
recognised by law but only issued a certificate of course completion
that the AME course was not approved by DGCA but they only issued a
Certificate of Approval to impart training but not to issue any degree,
diploma or certificate recognised by law. In view thereof, the exclusion
provided in the definition of Commercial Training & Coaching was
not applicable to the appellant as their role was limited to train
candidates to appear for the examination conducted by the DGCA and that
DGCA itself did not qualify as an institute recognised by law. Revenue
also contended that the instructions were not binding on quasi-judicial
authorities and thus the writ remedy was not available to the appellant.

The DGCA in its counter affidavit stated that being a
subordinate office of Ministry of Civil Aviation, Government of India it
is a regulatory body in the field of civil aviation primarily dealing
with safety issues with respect to air transport services, enforcement
of civil air regulations, air safety and air worthiness standards. They
further stated that in accordance of the CAR, AME institutes were
required to issue course completion certificates to the students who had
successfully passed, the format of which was approved by DGCA and that
DGCA was not empowered to grant/recognise degree or diploma course
offered by any institute/organisation.

Held
After
perusal of the Act and Rules along with CAR, it was held that not every
institute could offer such course and impart training without the
approval as per the Act, Rules and CAR. The DGCA regulated the course
content offered by such institute and gave relaxation to the successful
candidates by way of grant of authority/license to render services of
aircraft repair and maintenance and to certify the aircraft’s
airworthiness. The Hon. High Court interpreted the expression
“recognised by law” to have a wide meaning and thus held that even if
the certificate/degree/diploma/qualification was not the product of a
statute but had approval of some kind in ‘law’, it would be considered
as exempt. The reasoning in the impugned instruction mixes up and
confuses ‘qualification’ with “a license to practice on the basis of the
qualification”. An educational qualification recognised by law would
not cease to be recognised by law merely because for practicing in the
field, a further examination held by a body is required to be taken. In
view thereof, the instruction, being contrary to section 65(27) and
notification dated 25/04/2011, was quashed.

[Note: Earlier, on
the above issue, an advance ruling was decided against the assessee in
CAE Flight Training (India) Pvt. Ltd. vs. Commission of Service Tax,
Bangalore 2010 (18) STR 785 (AAR). Similarly, the CESTAT Mumbai also
decided against the assessee in Bombay Flying Club vs. CST, Mumbai-II
2013 (29) STR 156 (Tri.-Mumbai). These decisions appear to have been
overruled by the above.]