TaxTMI 
TaxTMI 
TaxTMI 
2010 (2) TMI 642
X X X X Extracts X X X X
X X X X Extracts X X X X
....s Licence (CPL) which enables them to fly only small aircraft such as Diamond and Cessna. The Commercial Pilot's Licence per-se does not allow or permit the holder to fly commercial passenger aircrafts such as B737s and A320s unless the holder undergoes an aircraft-specific type rating training. It is only after they have undergone the aircraft-specific type rating training and after their licence is endorsed to that effect that they are allowed to fly commercial passenger aircrafts. CFTI imparts flight training to the trainees whereby CPL holders are trained on specific aircraft simulators. Such aircraft-specific training is called 'type rating training' and is an extensive course of a minimum 37 days wherein the trainees are imparted specified skills and knowledge about specific aircraft. 3. CFTI, the applicant, has been providing 'dry' training to the Commercial Pilot's Licence (CPL) holders from various airlines who have already been type rated for specific aircraft. The 'dry' training involves granting the right to use the Full Flight Simulators to airline companies for scheduled hours with their pilots training under the guidance of airline company's own instructors. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....irlines?" 6. The application filed by CFTI was allowed by the Authority vide its order dated 22nd October, 2009 under Section 96 D(2) of the Finance Act, 1994 after duly considering the comments of the Commissioner of Service Tax, Bangalore. 7. Sub-clause (zzc) of clause (105) of Section 65 of the Finance Act, 1994 defines "taxable service" in the context of commercial training or coaching as a "service provided or to be provided to any person, by a commercial training or coaching centre in relation to commercial training or coaching". Clause (27) of the said Section 65 defines "commercial training or coaching center" as follows: "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 or a certificate and include 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 recognized by law for the time being in force; (emphasis supplied) As ment....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d in the Rules 6 B and 6 C." It has also drawn a reference to paragraph 5 of Section J, Schedule II of the Aircraft Rules, 1937 which specifies the evidence required to be produced by an applicant for extension of aircraft rating. The said paragraph 5 is reproduced below: "5. Extension of Aircraft Rating.- For extension of aircraft rating to include an additional type of aeroplane, an applicant shall be required to produce evidence of - (i) having passed a written examination in Aircraft and Engines as mentioned in para 1(d) and of having gained, under appropriate supervision, experience in flying the aircraft of such type or on approved flight simulator in respect of the following, namely:- (a) normal flight procedures and manoeuvres during all phases of flight; (b) abnormal and emergency procedures and manoeuvres in the event of failures and malfunctions of equipment, such as power plant, systems and airframe; (c) where applicable, instrument procedures, including instrument approach, missed approach and landing procedures under normal, abnormal and emergency conditions, including simulated engine failure; (d) procedures for crew in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....les, 1937. However, there is no statutory provision directly requiring issuance of such a certificate by the training organization". The Revenue also referred to an earlier clarification dated 14.12.2009 issued by the Chief Flight Operation Inspector, DGCA stating that... "This is to clarify that this sample course completion certificate will enable the trainee to complete some of the several parameters as laid down in Schedule II, Sections J and M of Indian Aircraft Rules and apply to Director (Training and Licensing) in order to obtain extension of aircraft type rating on his professional Pilot's license, which is the basic requirement to render him eligible for employment as a pilot". On the basis of these letters from DGCA, Revenue has contended that there is no statutory requirement for the Course Completion Certificate by DGCA and that such a certificate only enables the trainee pilot to apply to DGCA for appearing in the examination conducted by it. It is the examination conducted by the DGCA which is the statutory requirement and not any examination by the applicant. The applicant is merely coaching/preparing the candidates for this Type Rating Examination.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....proved examiner likewise. (J)......" The applicant has stated with reference to aforesaid entry (I) that the certificate issued by CFTI "needs to be attached along with the skill test reports (both day and night as well as IR test report) in the formats CA 40A or CA 40B as a mandatory requirement amongst others". In reply to the second query it has been stated by the applicant that DGCA does have a list of approved examiners who are authorized to comment on satisfactory or non-satisfactory performance of the trainees. They have enclosed a list of such examiners as on 12th March, 2009 as downloaded from DGCA's website. They have enclosed a letter dated 23rd October, 2009 from DGCA issued to CFTI according approval to a person as Synthetic Flight Instructor for CFTI for a period of five years. There is no mention of DGCA appointed 'approved Examiner' associated with it. 12. The crucial issue is whether a course completion certificate/ endorsement issued by CFTI can be said to be a requirement recognized by law for the time being in force. The argument of the Revenue that only certificates recognized by UGC, AICTE etc. can be said to be recognized by la....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ablishment has been approved by the Directorate General of Civil Aviation (DGCA) as a Type Rating Training Organization. It has also enclosed a communication dated 25.02.2009 to this effect from the DGCA in which it has been stated as follows:.- "It has been decided that a provisional approval to conduct type rating courses for B 737 NG is hereby granted subject to the following conditions: 1. The first two batches of trainee pilots, upon successful completion of the ground training syllabus, shall undergo DGCA technical/performance examination conducted by CEO. 2. The first two batches of trainee pilots, upon successful completion of simulator training shall be subject to skill test/ CA 40 checks and IR checks by Flight Operations Inspector. After the above process is completed, we shall review this provisional approval". A similar approval has been granted to CFTI to conduct Type Rating courses for A 320 Aircraft vide DGCA communication dated 20th May, 2009. It is noted that M/s CFTI have been given a provisional approval to conduct Type Rating courses. Further, the first batch of trainee pilots will be subjected to an examination by an agency othe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er, that is, an examiner approved by the DGCA. Even in the case of skill test reports [Serial No. 16(I)] in respect of which the applicant claims that the certificate of course completion issued by it is in fulfillment of this requirement of DGCA, it is noticed that what is required to be enclosed is the skill test reports in formats CA 40A or CA 40B and nothing else. On perusal of these formats it is noticed that these are required to be certified by a DGCA approved examiner and not by the training institute unless the institute itself is designated as an approved Examiner. Moreover, it is not the case of the applicant that presently an approved Examiner is attached to CFTI and certification is done by him/her on behalf of the Institute. The claim of CFTI that the certificate of course completion issued by it is required to be attached along with the application form in pursuance of the entry at Serial No. 16 (I) of the list of enclosures to the application form is not supported by the wordings of the said Entry. May be, in actual practice, this is being done; however, for that reason, it cannot be said that such certificate is prescribed under the Rules or the certificate is "rec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ation inter-alia exempts taxable services provided in relation to commercial training or coaching by a vocational training institute to any person from the levy of service tax. The expression vocational training institute has been defined in the Notification as follows: '(i) "vocational training institute" means a commercial training or coaching centre which provides vocational training or coaching that impart skills to enable the trainee to seek employment or undertake self-employment, directly after such training or coaching;' 20. CFTI has stated that it provides aircraft-specific training to Commercial Pilot's Licence holders so as to enable them to qualify for flying specific aircraft. The trainees who undergo Type Rating Training at CFTI would be able to seek employment with the airlines companies as first officer or co-pilots to fly specific aircraft alongside the Captain/Pilot in command. The applicant's representative has relied on the order of CESTAT in the case of M/s Pasha Educational Training Institute Vs Commissioner of Service Tax, Hyderabad 1 in support of its claim in this behalf. In this case the Tribunal held that the comprehensive training for Insurance A....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in the appellant-institute would directly enable the trainee to seek employment or undertake self employment. Except referring to the fact that the appellant institute is recognized by IRDA, no other reason is given to say that the appellant institute satisfies the ingredients of a vocational training institute. Moreover, there is a possibility of candidate undergoing training in the said institute seeking self employment in some form or the other in theinsurance sector. In the case before us the factual position as far as aircraft pilots are concerned is very much different. A Commercial Pilot's Licence holder cannot seek the job of flying an aircraft for which he has undergone Type Rating Training unless an endorsement to that effect is made in the licence of the CPL holder by the DGCA. It is the endorsement which makes him eligible to obtain employment with Airlines to fly the aircraft for which he has been type rated and not the fact of having completed the training with the institute. Surely the medical assessment required to be appended with the application form cannot be given by training institute. The DGCA clearly requires more than the course completion certificate for e....