2019 (5) TMI 260 - AT - Service Tax

Classification of service - various services offered by Ayurmana - whether fall within the meaning of therapeutic massage and hence are not liable to service tax? - HELD THAT - The massages offered by the appellant fall in the category of therapeutic and are not liable to pay service tax. Further, the massages are provided under the medical supervision of the trained doctors and proper record regarding the treatment is maintained by the appellant. The appellant has been certified as Ayurvedic Center by the District Medical Officer of Kerala - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Confirmation of demand of service tax
- Classification of services offered by the appellant
- Applicability of service tax on therapeutic massages

Confirmation of demand of service tax:
The appeal challenged an order confirming a demand of service tax, education cess, and higher education cess for the period 01/10/2002 to 31/12/2007 under Section 73(2) of the Finance Act, 1994. The Commissioner(Appeals) upheld the demand and imposed penalties, except for setting aside a penalty under Section 76. The appellant contended that the order was passed without proper appreciation of facts and evidence.

Classification of services offered by the appellant:
The appellant, a five-star hotel with an ayurvedic health club and fitness center named 'Ayurmana,' offered ayurvedic packages supervised by qualified doctors and therapists. The appellant argued that the services provided were therapeutic massages falling outside the scope of health club and fitness services. The Department contended that the resort was for pleasure and holidaying, with massages being optional for physical well-being.

Applicability of service tax on therapeutic massages:
After considering submissions, the Tribunal found that the massages offered were therapeutic and not subject to service tax. The massages were provided under medical supervision, with proper treatment records maintained. The Tribunal noted certifications and qualifications of doctors and the recognition of the center as an Ayurvedic Center. Referring to a previous case, the Tribunal highlighted that therapeutic massages, including ayurvedic massages, provided under medical supervision for curing diseases, were not taxable services. The Tribunal emphasized that the treatments offered by the center were therapeutic, based on ayurvedic methods, and provided under professional guidance.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal and providing consequential relief. The decision was based on the classification of services as therapeutic massages falling outside the scope of taxable services. The judgment emphasized the importance of medical supervision, treatment records, and adherence to ayurvedic practices in determining the applicability of service tax.