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TMI Blog2019 (6) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... re taken up for hearing together and a common order is being passed. 2. The issue involved in these appeals for consideration, relates to the leviability of service tax under the category of "Support Services for Business or Commerce" (BSS) as defined under Section 65(104c) read with Section 65(105)(zzzq) of the Finance Act, 1994 up to 01.07.2012 and under "Support Services", as defined vide Section 65B(49) of the Act from 01.07.2012 onwards, on the difference of amount charged by the appellants-hospitals to the patients towards doctors consultation and the charges paid by them to the visiting/consulting doctors. 3. The facts involved in these appeals, in brief are as under:- 3.1. The appellants run hospitals for providing healthcare and other related services to their patients. Such services are provided through two departments, viz. In-Patient Department (IPD) and Out-Patient Department (OPD). In case of IPD, patients are admitted in the appellants hospitals; whereas, in case of OPD, the patients are treated without being admitted in the hospitals. The patients in both IPD and OPD are being treated normally by the resident doctors, who are on the payroll of the appellants a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmed. The adjudged demands were confirmed, mainly on the ground that out of the billed amount collected from the patients, the appellants-hospitals paid certain percentage as 'professional fees' to the doctors and retained the balance amount on account of providing facilities, space/infrastructure etc., to the doctors, enabling them to carry out their professional activities. Thus, it was contended by Revenue that the services provided by the appellant-hospital should fall under the scope and ambit of taxable service under the category of BSS/Support service and the appellants should be liable to pay service tax thereon. 3.4 Being aggrieved with the adjudication orders (for short, 'the impugned orders'); the appellants-hospitals have preferred these appeals before the Tribunal. Further, Revenue has also filed appeals against the impugned orders, wherein the adjudicating authority has dropped proceedings initiated for demand of service tax on use of hospital infrastructural facilities by the doctors. 4.1 The Learned Counsels appearing for the appellants-hospitals , at the outset, submitted that the issue arising out of the present dispute in no more res integra, in view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d orders on the ground that extended period of limitation cannot be invoked for confirmation of the adjudged demands, beyond the normal period. 5. On the other hand, the Learned ARs appearing for the Revenue reiterated the findings recorded in the impugned order and further submitted that the ratio of the decision of coordinate Bench of this Tribunal, in the case of Sir Gangaram Hospitals & Ors. (Supra) would not be applicable to the facts and law involved in these cases, for the following reasons:- 5.1 In Sir Gangaram's case, the contract clearly brings out that the relationship between the appellants-hospitals and doctors was that of master and servant; whereas, in the present cases, the relationship between the doctors and hospitals is a business relationship, where the doctors are not paid any money by the hospitals, but are required to pay the hospitals for every facility used by them or their patients. 5.2 Referring to the terms of contracts involved in these cases, Revenue has categorised the transactions into three parts, one is between the doctor and patients, the other one is between the hospital and patients and the third one is between the hospital and doctors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and discussions with any supporting evidence regarding the type of support services provided and the amount received on such account by the hospitals, service tax demand cannot be fastened on the hospitals under the taxable category of BSS/Support Services. 8. Learned Counsels appearing for the appellants-hospitals strenuously argued that the issue arising out of the present dispute is no more open for any debate, both on facts as well as on law, in view of the decision of the co-ordinate Bench of this Tribunal in the case of Sir Gangaram Hospital (supra).On the contrary, Revenue has contended that the ratio of said decision of Tribunal is not applicable to the facts of the present case. For the sake of clarity and for ascertaining the applicability of the said decision to the facts of the present cases, the relevant observations made therein are summarised herein below: (i) That the arrangement between the hospitals and the doctors are for the joint benefit of both parties with shared obligations, responsibilities and benefits and that the agreements do not specify the specific nature or list of facilities that can be categorized as infrastructural support to the doctors, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aised the question of law, as to whether doctors are engaged in the business/profession so that the services provided by the hospitals can be covered in the scope of the definition of support services. In this context, the Learned AR for the Revenue, in his written submission dated 26.11.2018, has stated that the Tribunal in the case of Sir Gangaram Hospital (supra) has relied upon the judgment of Hon'ble Gujarat High Court in the case of Dr. K.K. Shah (supra) to hold that there was no tax liability on BSS in the facts and circumstances of the case. It has further been stated that the said decision of Tribunal is per incuriam in as much as the judgment in the case of Dr. K.K. Shah relied upon therein was delivered prior to the date of pronouncement of judgment by the Larger Bench of Hon'ble Supreme Court in the case of Barendra Prasad Ray (supra), holding that business includes a profession. 10.1 We find that on interpretation of the provisions of Section 9(1), 14, 160(1)(i), 161 and 163(1)(b) and (c) of the Income Tax Act, 1961, the judgment was delivered by the Hon'ble Supreme Court in the case of Barendra Prasad Ray (supra), holding that there was business connection between t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a definitive conclusion on the taxability of service, the main ingredients which need to be necessarily present, as per this statute, are the service, service provider, service receiver and the consideration for the service. In the instant case, the alleged service provider is undoubtedly the hospitals/ institutions; the service rendered is to the patients; remuneration is received by the hospitals/institutions and is paid by the patients. Understandably, the services rendered by the hospitals/institutions are at best medical services to the patients and by no stretch of imagination 'Business Support Services'. It is immaterial that the hospitals are paying a portion of the remuneration received to the doctors for the services rendered by them to the hospitals. It is the case of the department that the hospitals/institutions are rendering 'Business Support Services'to the doctors. In such a case, the hospitals should have charged the doctors for the services rendered to them. One cannot take a long drown conclusion that a portion of the doctors' fee paid by patients is retained by the hospitals/institutions and such retention should be treated as consideration paid to the hospital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the amount charged from the patients is necessarily also for such health care services. The patient paid the full amount to the appellant hospitals and received health care services. For providing such services, the appellants entered into an agreement, as discussed above, with various consulting doctors. We do not find any business support services in such arrangement. 7. The inference made by the Revenue that the retained amount by the hospital is to compensate the infrastructural support provided to the doctors can be examined in another angle also. Reading the statutory provisions for BSS, we note that the services mentioned therein are "provided in relation to business or commerce." As such, to bring in a tax liability on the appellant hospital, it should be held that they are providing infrastructural support services in relation to business or commerce. That means, the doctors are in business or commerce and are provided with infrastructural support. This apparently is the view of the Revenue. We are not in agreement with such proposition. Doctors are engaged in medical profession. As examined by Hon'ble Gujarat High Court in Dr. K.K. Shah (supra), though in an incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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