2016 (10) TMI 795 - AT - Service Tax

Taxability - health services - service tax levied on the said service w.e.f. 1/7/2010 and exemption granted vide N/N.30/2011-ST dated 25/4/2011 w.e.f.1/5/2011 - whether the said service remained taxable for the period 1/7/2010 to 30/4/2011 and extended period of limitation invocable? - Held that - I find that there is no element of suppression and or contumacious conduct on the part of the appellant. Rather it is evident from the record that upon information been received by the revenue from the insurance company of having paid consideration for health services to the respondent hospital and on further enquiry made from the appellant they have disclosed higher figure of turnover relating to such services. Under such facts and circumstances, I find that the learned Commissioner (Appeals) rightly deleted the penalties in question and no interference is called for. Extended period of limitation not invoked - appeal dismissed - decided against Revenue.

Summary

Issues:
- Appeal against appellate order setting aside penalties under Sections 70, 77, and 78 of the Act.
- Taxability of health services provided by a hospital/nursing home.
- Exemption notification No. 30/2011-ST dated 25/4/2011.
- Invocation of extended period of limitation.
- Deletion of penalties by the Commissioner (Appeals).
- Comparison of facts in relied-upon judgments by the Revenue.

Analysis:
The case involved an appeal by the revenue against an appellate order that set aside penalties under Sections 70, 77, and 78 of the Act. The respondent-assessee, a hospital/nursing home providing health and medical services, was subject to service tax on health services from 1/7/2010 under Section 60(105) ZZ. However, an exemption was granted from 1/5/2011 onwards through Notification No. 30/2011-ST dated 25/4/2011, making the service taxable for the period between 1/7/2010 to 30/4/2011.

The revenue issued a show-cause notice (SCN) on 14/2/14 invoking the extended period of limitation. The tribunal found no suppression or contumacious conduct on the part of the appellant. The record indicated that the revenue received information from an insurance company regarding payment for health services to the hospital, leading to the disclosure of a higher turnover by the appellant. Consequently, the penalties were rightly deleted by the learned Commissioner (Appeals), and no interference was warranted.

The revenue relied on the grounds of appeal and cited judgments like Quality Welding Works vs. C.C.E., 2011 (21) STR 187, and Jupiter Sea & Air Services vs. C.C.E., (2005) 2 STT. However, the tribunal noted that the facts in the referenced judgments were different from the present case, rendering them inapplicable. As a result, the appeal of the revenue was dismissed, and the order in appeal was confirmed. The judgment was dictated in open court by Mr. Anil Choudhary, Member (Judicial) of the Appellate Tribunal CESTAT ALLAHABAD.