2018 (8) TMI 106 - AT - Service Tax

Health club and fitness centre - whether the treatment given by the ayurvedic centres run by these resorts would come under therapeutic massages, etc.? - CBEC Circular No. B11/1/2002-TRU dated 1.8.2002. Held that - Ongoing through the records maintained by these ayurvedic centres, it is seen that they are maintaining case-sheets/treatment files and the treatment process schedule which is a normally done by hospitals also. By the mere fact that the ayurvedic centres are located in the premises of the resorts, it cannot be said that they cease to be ayurvedic centres coming to ayurvedic treatment per se. In view of the clear findings of the Commissioner (A) and the documentary findings produced by the respondents, it is seen that the ayurvedic centres are providing therapeutic treatment under ayurvedic system. Going by the mere fact that the centres are located in the resorts and sometimes the duration of treatment is for one or two days, it cannot be concluded that the massages or treatments offered by these centres are only for general well-being and not for any therapeutic value. Not all the people who stay in the resort may take the treatment. What is important is whether such treatments are given by a qualified Doctor/Doctors and whether the procedures are prescribed under therapeutic tests. It is not the department s contention that the massages and panchakarma and other treatments provided by the respondents are not mentioned in ayurvedic texts - all the required conditions for such treatments to be treated as therapeutic are specified and will fall under the exclusion provided by the Board Circular cited above. Appeal dismissed - decided against Revenue.

Summary

Issues:
Appeals against Commissioner (A) orders on service tax for ayurvedic treatment centers at resorts.

Analysis:
1. The issue involved in the appeals is whether ayurvedic treatments provided by resorts fall under "health club and fitness center" for service tax purposes.

2. The respondents operate ayurvedic treatment centers at resorts, supported by licenses, certifications, and qualified staff. The treatments offered are based on ayurvedic methods, supported by detailed patient records and specialized treatments for various ailments.

3. The respondents argued that their services are not taxable under "health club and fitness services" as the treatments are therapeutic and provided under medical supervision, not for general well-being. They highlighted the distinction between general massages and therapeutic massages, supported by definitions from dictionaries.

4. The Department contended that resorts primarily offer leisure services and that treatment for diseases should be provided in hospitals, not resorts. They argued that the ayurvedic packages provided by the respondents fall under health club and fitness services, subject to service tax.

5. The Tribunal examined the evidence presented, including certifications, case-sheets, and treatment procedures. It found that the ayurvedic centers operated by the respondents provided therapeutic treatments under qualified medical supervision, aligning with ayurvedic principles and texts. The treatments were found to be therapeutic in nature, not merely for general well-being.

6. The Tribunal upheld the Commissioner (A)'s decision, stating that the ayurvedic treatments offered by the resorts were therapeutic and fell outside the scope of service tax under health club and fitness services. The appeals filed by the Department were dismissed.

This detailed analysis of the judgment provides a comprehensive understanding of the legal issues, arguments presented, and the Tribunal's decision regarding the taxation of ayurvedic treatments at resorts.