TaxTMI 
TaxTMI 
2018 (1) TMI 168
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....llant had not discharged the service tax on the entire taxable value of services for the period 1.7.2010 to 31.3.2011. Show cause notice was issued alleging short-payment of service tax and the same was proposed to demand along with interest and for imposing penalties. After due process of law, the Commissioner confirmed the demand of Rs. 1,49,86,899/- along with interest and also imposed equal penalty under section 78 of the Finance Act, 1994 and Rs. 10,000/- under section 77 of the said Act. Aggrieved, the appellants are now before the Tribunal. 3. On behalf of the appellant, Ld. consultant Shri P. Paul Thangam assisted by Shri Arvind Thangam argued the matter both on the issue of limitation as well as on merits of the case. 3.1 On the issue of limitation, it was submitted by the ld. consultant that appellant deposited the entire amount collected from insurance company as service tax. The manner of charging of service tax was based on the instruction of the insurance company. The appellant was under bonafide belief that they have discharged service tax on the taxable portion of the consideration received by them. That there is no suppression of fact or intent to evade payment o....
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..... consultant relied upon the Master Circular No.1053/02/2017-CX dated 10.3.2017 and submitted that the Board has clarified that there should be active element of intent to evade payment of duty by action or inaction for invoking extended period. That such element is absent in the appellant case and therefore the show cause notice issued invoking the extended period is unsustainable. It is also argued that the appellant had entered into the agreement with Star Health and Allied Insurance Company for the purpose of carrying out the scheme on 28.7.2009 which is much prior to the date when Health Services became taxable. He also pleaded that in any case, the penalty may be set aside for the above reasons. 3.2 Secondly, on merits, the ld. consultant submitted that Kalaignar Kapeetu Thittam was a welfare scheme passed by GO (Ms) No. 49 dated 4.2.2009.The said GO clearly indicates that the scheme is for the poor and downtrodden. The scheme was floated by the State Government and operated through Star Health and Allied Insurance Company. The payment for the treatment rendered by appellant to the beneficiaries of the scheme was received by the appellant from the Tamil Nadu Government route....
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.... therefore this portion of the bills raised for inpatient cannot be subjected to levy of service tax. He argued that VAT and service tax are mutually exclusive. To canvas this argument, the ld. consultant relied on the decision of the Hon'ble Kerala High Court in the case of Sanjos Parish Hospital Vs. Commercial Tax officer reported in [2012] 55 VST 208 (Ker.) which held that medicines and consumables sold to patients through the hospital pharmacies would be taxable under the KVAT. The decision in the case of Imagic Creative Pvt. Ltd. - 2008 (9) STR 337 (SC) was relied to contend that VAT and service tax are mutually exclusive. It was also argued that the amount collected on behalf of specialist surgeons and paid in full to the specialist surgeon, will be covered under pure agent and therefore cannot be included in taxable value. He therefore submitted that the demand may be set aside. 4. Against this, the ld. AR Shri B. Balamurugan reiterated the findings in the impugned order. He submitted that as per the definition in section 65(105)(zzzzo) r/w section 67(1) of Finance Act, 1994, the gross amount received directly from the insurance companies by the appellant has to be taken as....
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.... care is made by such business entity directly to such hospital, nursing home or multi-specialty clinic or (ii) To a person covered by health insurance scheme, for any health check-up or treatment, where the payment for such health check-up or treatment is made by the insurance company directly to such hospital, nursing home or multi-specialty clinic; (The above service was taxable for the period 1.7.2010 to 30.4.2011. From 1.5.2011 onwards the same was exempted vide Notification No.30/2011ST dated 25.4.2011)" 7. The appellants had rendered the services as per the Kalaignar Kapeetu Thittam floated by the Tamil Nadu Government. GO (Ms.)49 dated 4.2.2009. The scheme has to be operated through approved insurance company. The entire reimbursement has to be paid by the Government to the insurance company on behalf of beneficiaries. Under this scheme, each beneficiary family will be insured for availing free medical treatment upto Rs. One lakh in a block period of four years. Families who are given identity cards under different welfare schemes such as agricultural labourer scheme, manual workers welfare board, construction workers welfare board etc. are to be included as eligible ....
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....on could not have been arrived at and the case laws referred to could not have been made applicable without going into the facts and the terms of the subject schemes which may be distinct and different from those considered in the decision relied on by the respondent. 11. In the light of the above, this Court is of the view that the matter should be reconsidered by the respondent as indicated in the preceding paragraphs and such exercise should be done. 12. For all the above reasons, the Writ Petition is allowed, the impugned order is set aside and the matter is remanded to the respondents to reconsider the entire issues afresh, without in any manner being influenced by the findings recorded in the impugned order dated 29-4-2016. For the purpose of taking a holistic view of the entire matter, the petitioner should be directed to produce all the documents concerning the Scheme and if the petitioner is unable to produce certain documents, it will be open to the first respondent to call for the same from the competent authority of the State Government and thereafter, make a thorough examination of the factual aspects and after affording an effective opportunity of personal hearing....