2024 (4) TMI 300 - AT - Service Tax

Levy of Service tax - Business Support Services - providing infrastructure and administrative facilities to the visiting doctors - Invocation of Extended period of Limitation - HELD THAT - As per the terms and conditions stipulated in the agreements between the appellant and the visiting doctors, such visiting doctors are being paid in proportionate to the actual work done by them, subject to the minimum fee assurance provided by the appellant. Further, it is the appellant s hospital that allocates a specific visiting doctor to the patients and patient s medical records are maintained and retained by the appellant s hospital. Also, the bills for treatment are raised by the appellant s hospital and not by the visiting doctors and the payments thereof are also collected by the appellant s hospital. Further, the visiting doctors are not allowed to undertake their independent practice/profession by availing the appellant hospital s infrastructure. Even in the show cause notice, it is mentioned that consultants/doctors are required to work for the hospital which clearly indicates that the doctors are working with the appellant s hospital and it is the visiting doctors who, in fact, are service providers to the appellant s hospital as the appellant s hospital is availing the services of such visiting doctors, for which they are paid by the said hospital as per the agreement and not the vice versa. Further, the appellant s hospital, being a service recipient, is deducting TDS in terms of Section 194 of the Income Tax Act, 1961 from the remuneration paid to the visiting doctors. This issue is no more res integra and has been settled in favour of the assessee by various decisions. In the case of M/S SIR GANGA RAM HOSPITAL, BOMBAY HOSPITAL MEDICAL RESEARCH CENTRE, APPOLLO HOSPITALS, M/S MAX HEALTH CARE INSTITUTE LTD VERSUS CCE DELHI-I, CCE ST INDORE, CCE ST RAIPUR, CST NEW DELHI AND CST DELHI VERSUS M/S INDRAPRASTHA MEDICAL CORPORATION LTD 2017 (12) TMI 509 - CESTAT NEW DELHI , it was observed by the Tribunal that Applying the above ratio and examining the scope of the tax entry for BSS, we are of the considered view that there is no taxable activity identifiable in the present arrangement for tax liability of the appellant hospitals. The decision of Sir Ganga Hospital s case was followed in the case of CCE ST, PANCHKULA, DELHI-IV VERSUS ALCHEMIST HOSPITAL LIMITED, ARTEMIS MEDICARE SERVICES LIMITED (VICE-VERSA) 2019 (3) TMI 1331 - CESTAT CHANDIGARH and it was held by the Tribunal that respondent-assessee were not provided any Business Support Service to the consultants/doctors or patient, therefore, no service tax is payable by respondent-assessee under the category of Business Support Service and in the result, the appeal filed by the Revenue was dismissed and the appeal filed by the assessee was allowed. Extended period of Limitation - HELD THAT - In the present case, there is no suppression on the part of the appellant to invoke the extended period of limitation and the Revenue has failed to establish ingredients of fraud, collusion, wilful mis-statement or suppression of facts or contravention of any of the provisions of the Act or Rules with an intent to evade the payment of tax as provided in Section 11A(4) of the Central Excise Act, 1944 as applicable to the service tax also. The impugned order is not sustainable in law and is set aside - appeal allowed.

Summary

Issues Involved:

1. Whether the appellant is liable to pay service tax under the category of "Business Support Services" in terms of Section 65(104c) read with Section 65(105)(zzzq) of the Finance Act, 1994.
2. Whether the extended period of limitation is invocable in the present case.

Summary of Judgment:

Issue 1: Liability to Pay Service Tax under "Business Support Services"

The present appeal challenges the order dated 11.12.2013, where the Commissioner of Central Excise & Service Tax, Ludhiana confirmed a service tax demand of Rs.90,96,590/- u/s 73(1) of the Finance Act, 1994, along with interest u/s 75 and penalties u/s 76, 77, and 78 of the Act. The appellant, operating a hospital, was alleged to be rendering "Business Support Services" to visiting doctors. The appellant argued that the true intention of their agreements with visiting doctors was to provide healthcare services to patients, not to lease out infrastructure. The visiting doctors were paid based on work done, and all patient contracts and billing were handled by the hospital. The Tribunal found that the doctors were service providers to the hospital, not vice versa, and the hospital deducted TDS from payments to doctors as per Section 194 of the Income Tax Act, 1961. Citing precedents, including Sir Ganga Hospital vs. CCE, Delhi-I, the Tribunal concluded that the hospital did not provide "Business Support Services" to the doctors, and thus, no service tax was payable under this category.

Issue 2: Extended Period of Limitation

The appellant contended that there was no suppression of information to justify invoking the extended period of limitation. The Tribunal agreed, noting that the appellant had been filing regular Service Tax Returns and disclosing all relevant documents. The Tribunal referenced several Supreme Court decisions, including Collector of CE vs. H.M.M. Limited and Easland Combines Coimbatore vs. Collector of CE, Coimbatore, which clarified that extended limitation requires evidence of fraud, collusion, or willful misstatement. Finding no such evidence, the Tribunal held that the extended period of limitation was not applicable.

Conclusion:

The Tribunal set aside the impugned order, allowing the appeal with consequential relief, if any, as per law.

(Order pronounced in the court on 05.04.2024)