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TMI Blog2024 (4) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... ided to Government by way of public health in terms of Notification No. 25/2012-ST dated 20.06.2012. ii) However he was pleased to confirm the demand for Rs. 1,18,97,295/- towards service tax on the taxable service Dial 100 Project for the period April 2013 to March 2016 along with appropriation of matching amount already paid. Further interest was demanded under Section 75 and the amount already deposited Rs. 46,04,563/- was appropriated towards the interest liability. Further penalty of Rs. 81,19,495/- was imposed under Section 78 of the Finance Act. Further penalty of Rs. 10,000/- was imposed under Section 77. The personal penalty proposed on Mr K. Krishnam Raju, Director was dropped. 2. Revenue is in appeal being appeal No. ST/30093/2019 against dropping of the demand and the Appellant assessee is in appeal No. ST/31 268/2018 against confirmation of the part of demand for service tax with respect to Dial 100 Project. The Appellant assessee also filed Miscellaneous Application for additional evidence in both the appeals being Miscellaneous Application No. ST/AE/30231/2023 in appeal No. 31268/2018 and Miscellaneous Application No. ST/AE/30646/2019 in appeal No. ST/30093/ 2019. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ritories through emergency toll-free numbers 108/104/102 etc. 6. Dial 108 Project: this emergency telephone number for integrated medical, police and fire emergency service and the project executed by the assessee using this toll-free number is called by them as Dial 108 Project. This was implemented in about 14 States/Union Territories. They are providing the emergency response service under public-private partnership by operation and maintenance of the fleet of ambulances of the respective State Governments which includes provision of manpower, infrastructure, technology, training, 24x7 call centre, fleet management of the ambulances, administration, managerial support etc. 7. Dial 102 Project: this emergency number is for the pregnant women, newborn child for taking them to hospital and drop back to home commonly called as inter-facility ambulance 102 project or 102 ambulance project. They are providing the emergency response service which includes the same provisions as project 108 like manpower, infrastructure, technology, training etc. 8. Dial 104 Project: this emergency number is for the day health services commonly called '104 Ambulance Project' by the assessee. In this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fy as clinical establishment, authorised medical practitioner or para medic to avail the exemption under health care services. Further, it appeared that exemption if any would be available only to the extent of cost of transportation of the patient and not for the management of emergency response activity. It further appeared that these services were not declared to the Department in the ST-3 returns filed by them. 13. It further appeared that the assessee was working under selfassessment scheme and they themselves were obligated to correctly assess the service tax liability and pay the same by the due date and also file their periodical returns. It appeared to Revenue that the assessee failed to declare their full service consideration in the periodical return(s) filed, nor they claimed any exemption from payment of service tax on any service. As such Revenue remained fully unaware of their activities. Thus, it appears that the assessee have not made proper disclosures amounting to suppression of the relevant facts in their ST-3 returns, filed with intent to evade payment of service tax. It further appeared had Revenue not initiated enquiry based on intelligence, the aforemention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount of service tax mentioned at Sl.No. (ii) above; v. Whether an amount of Rs. 46,04,563/- paid as interest by M/s GVK EMRI, is liable for appropriation against their interest liability at Sl. No. (iv); vi. Whether M/s GVK EMRI is liable for mandatory penalty under Section 78 of the Finance Act, 1994? vii. Whether M/s GVK EMRI are liable for penalties under section 76 & Section 77 of the Finance Act, 1994?; and viii. Whether Sri K. Krishnam Raju, Director of M/s GVK EMRI is liable for penalty under Section 78A of the Finance Act, 1994? 16. The Learned Commissioner after examining the reply to show cause notice and hearing the Appellant assessee recorded the findings as follows: - The crux of the allegation in the notice was that services of management and implementation of the operation of emergency response service fall under the category of taxable service under Clause 51 read with Clause 44 of Section 65B of the Finance Act 1994 and the said services were neither exempt under entry No. 2 of Notification No. 25/2012 - ST nor fall under the negative list of the services under Section 66D of the Finance Act. It is further alleged that the exemption if any, be avai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the nearest hospital for further detailed healthcare service/intensive-care. Hence the services are termed as pre-hospital medical care. In support of their claim the assessee had relied on the award received by them under the health category - they got certificate under ISO 9001:2015 for providing free hospital emergency services. Hence they contended that their service clearly falls under Serial Number 2(i) & (ii) of Notification No. 25/2012 - ST and thus the services were unconditionally and wholely exempted. It was also the contention that they do not collect any amount for the service provided from the beneficiary. The said service is provided against an agreement with the State Health Department and they receive their consideration from the Health Departments of the respective State Governments. Further, they have never collected any service tax from the respective State Governments as they were under bonofide belief that the subject service was clearly exempted under the above mentioned Notification. They also referred to the Board Circular No. 210/2/2018 - ST dated 30.05.2018 wherein it was categorically stated that the subject service provided to the Government by way of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that medical officer shall be available on 24x7 basis. 22. The Commissioner also examined MOU dated 14.08.2008 between the Appellant assessee and Government of Karnataka with regard to comprehensive emergency response service for the entire population of Karnataka by using 108 toll-free number for a period of 10 years. As per the said agreement the responsibilities of the assessee interalia include the following: - They shall provide a vital emergency management information and assistance to raise a societal awareness and capability in emergency management and response mechanisms to save lives and reduce the economic impact to the citizens, firms and the Government; that they should operate the ambulances and ensure that ambulance services are available on a 24-hour per day and 365 days a year basis; that they will recruit, train and position the required manpower, including pilots - drivers and emergency medical technicians who will be present in the ambulances while shifting an emergency case to a hospital; that at least one pilot and one emergency medical technician shall be present at any given point of time to provide patient stabilisation, first-aid and other pre-hospi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the needs of pregnant women and children, though other categories are also taking benefit and are not excluded. Many States are operating the ambulance service on an outsource model and these services are funded under the NHM and provided for free of cost to all patients. The Board observed - that this entire project involves 3 legs of activities, one by the Government for the public, second by the PSP for the public and third by the PSP for the Government. In respect of the first and the second legs of activity that is the ambulance service being provided by the Government and PSP to the patients, neither the State Governments nor the PSP charges any fee from the patients to avail of these ambulance services. The PSP however charges a fee from the State Government for carrying out the third activity. 27. Any activity carried out by one person for another without any consideration, will not be covered under the definition of service under Section 65B(44) of the Finance Act 1994. Even if a consideration was charged by virtue of entry to II of Notification No. 25/2012 - ST, services provided by way of transportation of a patient in an ambulance, other than healthcare service by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the Police/ Home Department of the State Government. In fact the Appellant have discharged the service tax liability of Rs. 1,19,05,483/- along with interest of Rs.46,04,563/- before issue of show cause notice, during investigation by the Department. In view of the liability to tax being admitted for call centre service linked to telephone no. 100 the Learned Commissioner did not further examine the taxability of the same. 31. Learned Commissioner also noticed that against the total tax liability for dial 100 project Rs. 1,18,97,295/- for the period 4/2013 to 3/2016 the Appellant have already deposited Rs. 1,19,05,483/-, thus they paid Rs. 8,188/- in excess of their total liability. Accordingly, Learned Commissioner was pleased to appropriate the amount of Rs. 1,18,97,295/- in respect of the liability for dial 100 project as per annexure B3 to SCN. Further the Learned Commissioner was pleased to drop the demand of Rs. 355,04,65, 858/- (356,23,63,153-1,18,97,295) for the period July 2012 to March 2017 with respect to emergency response service of dial 102/104/108. The Learned Commissioner further ordered recovery of interest under Section 75 on the amount of service tax confirm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stablishment, an authorised medical practitioner or paramedics up to 31.03.2015 when the notification was amended to include other than the clinical establishment and authorised medical practitioner or paramedics vide amending Notification No. 6/2015 dated 01.03.2015. Further urges that for the period 11.07.2014 to 30.05.2017 according to circular dated 30.05.2018 it is clarified that the provision of ambulance services to State Government under NHM is exempted. Further urges that the services were not rendered to a municipality. It is onus of the assessee claiming exemption to prove the entitlement to exemption, as held by Supreme Court in CC Vs Dilip Kumar [2018 (361) ELT 577]. 37. Learned Special Counsel further urges that there are agreements entered into by the appellant assessee under Dial 108/104/102 schemes indicates that the same is to cater to not only health and medical related emergencies but also those related to Police/fire emergencies as specifically mentioned therein. This have been also specifically mentioned by the authorised person Shri K. Marga Bandhu wherein he interalia stated that the MOU with the State Governments were meant to provide comprehensive emergen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e incidental or ancillary to the other /main service - related to public health or that these help in better provision/enjoyment of the latter. 41. Opposing the appeal of Revenue Learned Counsel for the assessee urges that it is an admitted fact in the SCN, that wherever this service of Project 100 relating to fire and police have been separately provided under separate agreement, for which separate remuneration was determinable, the Appellant have deposited the service tax along with interest before issue of SCN. So far in respect of other contracts where the services are bundled and the major service was health service, it is urged that there was no such proposal in the SCN to bifurcate the gross in respect of comprehensive service and tax the taxable element separately with regard to Police/fire response service. The Learned Counsel further urges that under the comprehensive service the calls/response related to Police/fire was less than 5% or only minuscule. Further evidently the services under the contract where naturally bundled and no separate remuneration with respect to Police/fire have been billed and or received. Thus under the provisions of Sub Section (3) of Section 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on being so advised, during the course of investigation/enquiry, deposited the service tax where the receipts are under separate contract for the Police/fire services under Project 100. 46. Learned Counsel further urges that in view of these admitted facts, there is no case of suppression, fraud, mis-statement etc., made out against the assessee with intent to evade payment of tax. Accordingly he urges that the demand for extended period of limitation be set aside. He further urges that accordingly penalty under Section 78 is not impossible there being no deliberate default in payment of service tax. 47. Learned Special Counsel for Revenue opposing the appeal of assessee reiterated the findings in the impugned order where in the Commissioner have observed that the assessee was well aware of the provisions of service tax as they had themselves got registered with the Service Tax Department and have paid certain amounts of service tax to the Department. The evasive nature of the assessee is evident from the fact that the assessee never bothered to include the total value of proceeds of the services under dispute in their ST3 returns, evidently to suppress the information from the D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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