2013 (11) TMI 297 - AT - Service Tax

Skin treatments/procedures - Beauty treatment services u/s 65 (17) of Chapter V of Finance Act 1994 Held that - Commissioner should have examined and discussed about the remaining 4 treatments/procedures and thereafter taken decision in respect of whole demand - Demands were computed in respect of each treatments/procedures order set aside - Commissioner would examine in respect of all the remaining treatments/procedures and thereafter decide the matter Decided in favour of Revenue.

Summary

Issues involved:
Revenue's appeal against orders-in-revision passed by the Commissioner in relation to treatments/procedures provided by the respondent, classification of services as medical or beauty treatment services under section 65(17) of the Finance Act, 1994, Commissioner's examination of only a portion of treatments/procedures leading to dropping of entire demands, Revenue's contention that all treatments/procedures should have been examined, and the need for personal hearing before deciding the matter.

Analysis:
The case involved three appeals filed by Revenue against orders-in-revision passed by the Commissioner concerning treatments/procedures provided by the respondent. The core issue was the classification of these services as either medical services or beauty treatment services under section 65(17) of the Finance Act, 1994. The show cause notices were based on the premise that the services provided were beauty treatment services, thus attracting service tax. However, the respondent argued that the services were medical in nature and therefore not liable for service tax. The Commissioner, after reviewing the treatments/procedures, dropped the demands. The Revenue contended that the Commissioner had not examined all treatments/procedures, leading to the dropping of entire demands without proper consideration.

In the first appeal, the Commissioner discussed only 9 out of 13 treatments/procedures, dropping the entire demand. Similarly, in the second appeal, out of 20 treatments/procedures, only 10 were examined, and in the third appeal, out of 13 treatments/procedures, only 9 were discussed, resulting in the dropping of demands for all treatments/procedures in both cases. Revenue argued that the Commissioner should have examined and discussed all treatments/procedures before making a decision on the demands.

Upon hearing both sides, the Tribunal found merit in Revenue's contention. The demands were calculated for each treatment/procedure, and it was deemed necessary for the Commissioner to examine all remaining treatments/procedures before reaching a decision. Consequently, the Tribunal allowed all three appeals filed by Revenue and set aside the Commissioner's orders. It was emphasized that the Commissioner should review all treatments/procedures and grant a personal hearing to the respondents before making a final decision on the matter.

In conclusion, the Tribunal allowed the appeals in favor of Revenue, highlighting the importance of a comprehensive examination of all treatments/procedures and the necessity of providing a personal hearing to the respondents before reaching a decision.