2018 (7) TMI 1533 - AT - Service Tax

Health Club Fitness Center Service - eligibility for exemption under N/N. 25/2012 ST - Held that - Appellant are rendering Health care services which are related to Health problem and are mainly in the nature of corrective as well as preventive of the probable diseases which occur due to the obesity and overweight of the patients. That the services are rendered under the direction of qualified physiotherapist - However, the Appellant either during investigation or in their submission before lower authorities has never adduced any evidence that the services are being rendered by an authorized medical practitioner or para medicals. The Appellant has come up with such contention only before us at the Appellate stage. Even from the treatment offered it does nowhere occurs that the same are physiotherapy services as the nature of services shown are for excessive weight or shoulder pain - The Appellant is not entitled to the exemption from payment of service tax under Notification and the service tax demand has been correctly made - penalties imposed are also upheld. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Service tax demand on Health Club & Fitness Center Service
2. Recovery of cenvat credit
3. Interest and penalty imposition
4. Exemption from service tax
5. Penalty imposition on Appellant

Analysis:
1. The appeal was filed against an Order-in-appeal demanding service tax on "Health Club & Fitness Center Service" for a specific period. The appellant was also asked to recover cenvat credit. The notice proposed interest under section 75 and penalties under Sections 78 and 77 of the FA, 1994. The demand was confirmed by the adjudicating authority, leading to appeals from both the Appellant and the revenue.

2. The Appellant argued that they provide health-related services under the supervision of a qualified physiotherapist and should be exempt from service tax. They claimed to have deposited the entire service tax amount with interest, indicating their belief in eligibility for exemption. The Appellant contended that the penalty should not be sustained as there was no intention to evade service tax.

3. The revenue countered by stating that the Appellant had not paid service tax in an earlier period but did so under a voluntary scheme, showing awareness of their tax liability. They argued that the impugned order was correctly passed.

4. The judgment found the Appellant's reliance on exemption notification to be erroneous as they failed to provide evidence that services were rendered by authorized medical practitioners. The Appellant's claim for exemption was rejected, and the service tax demand was upheld. Penalties under various sections were confirmed, including penalty for late return filing and registration. The Commissioner's decision to grant a 50% waiver on one penalty was upheld, and no further reduction was deemed necessary. The impugned order was upheld, and the appeal was dismissed.

This detailed analysis covers the issues of service tax demand, cenvat credit recovery, penalty imposition, exemption eligibility, and the final judgment's outcome, providing a comprehensive understanding of the legal judgment.