2019 (4) TMI 241 - AT - Service Tax

Cleaning services to Child Trust Hospital - CBEC circular in F. No. B1/6/2005-TRU dated 27.7.2005 - Held that - In the present case, the assessee has produced documents to show that the said hospital been given approval under section 80G(5)(iv) of the Income Tax Act for deduction in donations made to Kanchi Kamakoti Child Trust Hospital. The department merely alleges that the hospital is receiving fees and therefore cannot be considered as non-commercial hospital. No evidence is put forth by the department that the hospital has collected expenses / fees from patients for treatment. If a hospital merely collects registration fees for registration of the patient and does not collect expenses for treatment, it cannot be said that the said hospital would fall out of the category of non-commercial building / hospital. The department having failed to establish with evidence, that Child Trust Hospital is a commercial building, the conclusion arrived by the Commissioner (Appeals) that the said hospital is a non-commercial hospital and the services rendered by the assessee to the hospital would not come within the purview of service tax requires no interference. Imposition of penalty - outdoor caterings service - extended period of limitation - Held that - Apart from alleging that the assessee did not disclose the service tax payable under cleaning service, there is no allegation of suppression of facts on the part of the assessee. The cleaning services are not subject to levy of service tax - the conclusion of the Commissioner (Appeals) that demand for the extended period cannot sustain requires no interference, the penalty has been rightly set aside by the Commissioner (Appeals). Outdoor catering service - demand of service tax - Held that - Appellant have availed credit on various input services like telephone, courier, security which are used for providing outdoor catering service. On such score, it is very much clear that there is violation of the condition of the notification. Therefore, the assessee cannot take the benefit of notification. The demand confirmed by Commissioner (Appeals) for the normal period on outdoor catering service is legal and proper. Resultantly, the impugned order does not call for any interference. Appeal disposed off.

Summary

Issues:
Demand of service tax on cleaning services
Eligibility of abatement under Notification 1/2006 for outdoor catering services

Analysis:
1. Demand of service tax on cleaning services:
The case involved the assessee providing cleaning services to a hospital, with the department claiming the hospital to be a commercial concern due to patient fees. The Commissioner (Appeals) set aside the demand, citing the hospital as a non-commercial building. The Tribunal supported this decision, emphasizing the lack of evidence proving the hospital's commercial nature. The hospital's approval under the Income Tax Act and absence of evidence on patient fee collection supported the non-commercial status, leading to the dismissal of the department's appeal.

2. Eligibility of abatement under Notification 1/2006 for outdoor catering services:
Regarding the abatement issue, the Commissioner (Appeals) confirmed the demand for the normal period due to the violation of conditions in Notification 1/2006. The Tribunal upheld this decision, noting the assessee's improper availing of CENVAT credit on common input services for outdoor catering. The violation of notification conditions rendered the assessee ineligible for abatement benefits, resulting in the dismissal of both the assessee's and department's appeals.

In conclusion, the Tribunal dismissed both appeals, affirming the Commissioner (Appeals)'s decisions on the demand for cleaning services and the eligibility of abatement for outdoor catering services. The judgment highlighted the importance of complying with notification conditions and providing substantial evidence to support claims, ultimately upholding the original decisions in both issues.