Medical practitioners directly appointed by hospital not liable for service tax under Business Support Service category

CESTAT Mumbai set aside service tax demand under 'Business Support Service' category for medical practitioners directly appointed by appellant hospital. Tribunal proceeded ex-parte after multiple adjournments citing Section 35C mandate limiting adjournments to three times. Relying on established precedents including Sir Ganga Ram Hospital, Gujarmal Modi Hospital, and Fortis Healthcare cases, Tribunal held the taxability issue was settled law. Commissioner (Appeals) had similarly allowed appeal in comparable Wockhardt Hospital case. Appeal allowed in appellant's favor.

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The Appellate Tribunal (CESTAT Mumbai) invoked Section 35C of the Central Excise Act, 1944 (applicable to service tax under Section 86(7) of the Finance Act, 1994), which "mandated that no adjournment shall be granted more than three times" during appeal hearings. Having granted multiple adjournments and noting the appellant's repeated non-appearance, the Tribunal proceeded to decide the appeal on available records with the Revenue's representative.The core issue concerned the demand of service tax under the category of 'Business Support Service' for medical practitioners directly appointed by the appellant. The Tribunal held this issue is "no more res integra," relying on precedents including Sir Ganga Ram Hospital (2020 GSTL 390), Gujarmal Modi Hospital (2019 TMI 378), Fortis Healthcare (2019 TMI 462), Ivy Health & Life Science (2019 TMI 178), Alchemist Hospital (2019 TMI 1331), and Maharaja Agrasen Hospital (2024 Centax 193). These authorities have consistently addressed the taxability of such services.Further, the Tribunal noted that the Commissioner (Appeals) had allowed a similar appeal in Wockhardt Hospital, Rajkot, setting aside the demand.Accordingly, the Tribunal concluded that the adjudicating authority's order confirming the service tax demand "cannot be sustained," set aside the impugned order, and allowed the appeal in favor of the appellant.

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