2024 (3) TMI 129 - AT - Service Tax

Non-payment of service tax - Cleaning Services - Manpower Recruitment or Supply Agency Services - Services provided by the respondent to the Government Hospitals, Medical Colleges, Primary Health Centres, Community Health centres, Arogya Parivar Kendra, Block health Centres, Panchayat Health Centres, Municipal Corporation, District Ayurved Office Bhavnagar etc. - exemption from payment of Service tax under Sr. No. 25(a) of the Notification No. 25/2012-ST dated 20.06.2012 - exemption denied on para medics and other staff provided by the respondent - services provided to the Education Institution i.e. Dr. Baba Saheb Ambedkar Open University, Government Medical College, Government college, Nursing College, University Granth Nirman Board, Sport Authority of Gujarat/ Sport Training Centers, IPR- Institute of Plasma Research, Gandhinagar etc. - time limitation - suppression of facts or not. Demand of Service tax of Rs. 50,02,195/- is dropped by merely relying the upon a CA certificate - HELD THAT - The Ld. Commissioner after verifying the CA Certificate dated 09.07.2019, ledger of Service tax liability, ST-3 returns and other documents etc., found that the difference of Service tax collected and not paid is of Rs. 60,604/-. Ld. Commissioner has therefore held the demand of Rs. 60,604/- is sustainable and remaining amount of Rs. 52,02,195/- is not sustainable - It is found that as regard the said dropped demand revenue in the present appeals nowhere rely upon any details/ documents or any evidence by which it can be concluded that the demand dropped by the Ld. Adjudicating authority is not correct. Services provided by the respondent to the Government Hospitals, Medical Colleges, Primary Health Centres, Community Health centres, Arogya Parivar Kendra, Block health Centres, Panchayat Health Centres, Municipal Corporation, District Ayurved Office Bhavnagar etc. - HELD THAT - On perusal of the entry of N/N. 25/2012-ST dated 20.06.2012 as amended vide Notification No. 6/2014-ST dated 11.07.2014, it would be seen that the above said exemption is available to services which are provided to Government, a local authority or a government authority by way of carrying out any activity in relation to any function ordinarily entrusted to a Municipality in relation to water supply, public health, sanitation conservancy, solid waste management upto 10.07.2014 and w.e.f. 11.07.2014 services by way of water supply, public health, sanitation conservancy, solid waste management of slum improvement and up-gradation - The words any activity and by way of employed by the legislature in above exemption entry of Notification No. 25//2012-ST would make it abundantly clear that all the activities involved in relation to public health are covered under the said entry - there are strength in the finding of Ld. Adjudicating authority that any services provided to government in relation to water supply, public health, sanitation conservancy, solid waste management or slum improvement etc, is exempted from payment of service tax in terms of above mentioned Notification - the concept of categorization of services under Section 65 of the Finance Act, 1994 has been redundant after 01.07.2012. For the exemption of service tax under the disputed entry only two requirements has to be satisfied. First the service must be provided to Government, Local Authority or a Governmental authority and second is the services must be any activity in relation to public health. In the present disputed matter respondent fulfill both the requirements - there are no reason for interfering in the conclusion reached by the Ld. Commissioner in the impugned order - impugned order is correct, legal and does not suffer from any infirmity. Denial of exemption also take the ground that the para medics and other staff provided by the respondent do not have any direct contract with the patients and do not raise any invoices on the patients and also do not have any legal responsibility to provide public health services on his own account - HELD THAT - A plain reading of the provisions of N/N. 25/2012-ST as amended makes it clear that there is no requirement of a contract between the para-medics, etc. and Patients. There is no requirement that such para-medics and personnel must issue invoices in the name of patients. In such circumstance, it is not permissible to insert such a requirement with a view to deny the exemption. The requirement of the said above exemption entry is only that services must be provided to Government in relation to public health. Once it is the requirements of exemption only, any further condition of contract or invoice between the service provider and patients that is nowhere specified in the above notification cannot be read into it. Demand dropped by the Ld. Commissioner on services provided to the Education Institution i.e. Dr. Baba Saheb Ambedkar Open University, Government Medical College, Government college, Nursing College, University Granth Nirman Board, Sport Authority of Gujarat/ Sport Training Centers, IPR- Institute of Plasma Research, Gandhinagar etc. - HELD THAT - All the Services provided to education institution such as transport services, hostels, housekeeping, security, canteen services and any other type of services provided to education institution are exempted from payment of service tax and covered under the above entry of exemption notification. In the disputed matter it is on record that respondent supply the manpower to educational institutions by way of drivers/ administrative staff/ class 3 4 staff that are essential for the educational institutions for performing their works. Therefore respondent is eligible for exemption from payment of Service Tax for supply of manpower to above mentioned educational institutions under Sr. No. 9 of Notification No. 25/2012-ST dated 20.06.2012. Cleaning and housekeeping services provided by the respondent to Government offices, Courts, government undertakings - HELD THAT - The cleaning and housekeeping services are essential parts of sanitation conservancy and waste management. On going through the sample work contract No. GFSU/Housekeeping/9/1/2016 dated 01.01.2016 wherein the scope of works includes cleaning toilets, wash basins, urinals, overhead water tanks, clearing drainages, sewers, manholes, pest control etc. The respondent are eligible for exemption under Sr. No. 25(a) of the Mega Notification No. 25/2012-ST dated 20.06.2012 for cleaning and Housekeeping service provided to Government Hospitals and other government entities. Time limitation - Suppression of facts or not - HELD THAT - If a tax is chargeable, in order to recover the service tax not paid or short paid a notice has to be issued under Section 73 of the Act. This is the only remedy available to the Revenue. The notice can be issued within the normal period of limitation only unless the elements of fraud or collusion or willful statement or suppression of facts or contravention of any provisions of the Act or Rules with an intent to evade payment of service tax is established. If any of these elements are established in any case, the demand can be raised within an extended period of limitation of 5 years - there are no willful or deliberate suppression of the fact with intent to evade payment of service tax. We are of the opinion that whether the respondent is entitled for the benefit of the exemption notification or not depend on the interpretation of the exemption notification and on the contrary, to a very large extent, their interpretation is found correct. Thus, it is evident that there is not even an iota of evidence to even suggest that there was any willful misstatement or suppression of facts on the part of the Respondent. Consequently, extended period is not invokable in this case. The impugned order is upheld - Revenue's appeals are dismissed.

Summary

Issues Involved:
1. Whether the services provided by the respondent to government hospitals, health centers, and educational institutions are exempt from service tax under Notification No. 25/2012-ST.
2. Whether the cleaning and housekeeping services provided by the respondent to government entities are exempt from service tax.
3. Whether the extended period of limitation for demanding service tax is applicable in this case.

Summary:

1. Exemption for Services to Government Hospitals and Health Centers:
The Revenue contended that the services provided by the respondent, such as manpower supply to government hospitals and health centers, do not qualify for exemption under Sr. No. 25(a) of Notification No. 25/2012-ST. The adjudicating authority found that the services provided by the respondent are indeed in relation to public health and thus exempt from service tax. The Tribunal upheld this decision, noting that the paramedics and other staff provided by the respondent worked under the supervision of government medical officers, thereby fulfilling the conditions of the exemption notification.

2. Exemption for Services to Educational Institutions:
The Revenue argued that the services provided to educational institutions, such as the supply of Class 3 & 4 staff/drivers, do not qualify as "auxiliary educational services" and thus are not exempt from service tax. The adjudicating authority, however, concluded that these services are essential for the functioning of educational institutions and are therefore exempt under Sr. No. 9 of Notification No. 25/2012-ST. The Tribunal agreed with this conclusion, citing the clarification provided by the CBEC Circular No. 172/7/2013-ST.

3. Exemption for Cleaning and Housekeeping Services:
The Revenue challenged the exemption granted for cleaning and housekeeping services provided to government offices, courts, and other government undertakings. The adjudicating authority had concluded that these services are integral to public health and sanitation conservancy and thus exempt under Sr. No. 25 of Notification No. 25/2012-ST. The Tribunal upheld this conclusion, emphasizing that cleaning and housekeeping are essential parts of sanitation conservancy and waste management.

4. Extended Period of Limitation:
The Revenue argued that the extended period of limitation should apply due to the respondent's willful suppression of facts. The adjudicating authority found no evidence of intent to evade tax and thus did not invoke the extended period. The Tribunal upheld this finding, stating that the issue involved interpretation of the exemption notification and there was no willful misstatement or suppression of facts by the respondent.

Conclusion:
The Tribunal upheld the adjudicating authority's order, confirming that the services provided by the respondent to government hospitals, health centers, and educational institutions are exempt from service tax under Notification No. 25/2012-ST. The cleaning and housekeeping services provided to government entities are also exempt. The extended period of limitation for demanding service tax is not applicable in this case. The Revenue's appeals were dismissed.