TaxTMI 
TaxTMI 
2024 (10) TMI 824
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt is registered with the Service Tax department under "Healthcare Services" and "Renting of Immovable Property". For providing the pathology lab and other diagnostic services in the hospital, the appellant entered into agreements with Dr. Lal Pathlabs Pvt. Ltd., Mangalam Lab, 360 Degrees Healthcare Pvt. Ltd. and Clearview Healthcare Pvt. Ltd. (collectively known as "Diagnostic Service Providers" or in short "DSPs"). Further, as per the agreements, the appellant provides basic amenities such as space, water, electricity etc to DSPs and DSPs are allowed to install and operate their equipments in the appellant"s premises. DSPs render services to patients within the hospital premises or outside the premises. The appellant and DSPs agree to share the revenue earned by way of rendering diagnostic and other services by DSPs to the patients, in an agreed percentage. DSPs and the appellant reconciled the amount of collections and the administrative charges. Thereafter, DSPs would raise monthly bills on the appellant for their share of revenue. The department initiated an investigation against the appellant alleging that the appellant was rendering "Business Support Services (BSS)" under Se....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of providing the healthcare services to the patients. The "joint-venture or co-venture" is a term used very widely and understood to mean an intention to do business with a mutual gain. In order to constitute a joint venture, there must be a contractual arrangement with an objective of undertaking common enterprise. She submits that in the instant case, the appellant and DSPs have agreed to a revenue sharing arrangement on principal-to-principal basis to further their mutual interests of providing healthcare services to the patients. She relies on the following cases wherein it has been held that there is no provision of service in the revenue sharing arrangements: Mormugao Port Trust vs. CCE - 2017 (48) STR 69 (Tri. - Mum.) [Affirmed in 2018 (19) GSTL J118 (Supreme Court)] M/s Fazilka Coop Sugar Mills Ltd. vs. Commissioner of Central Excise, Chandigarh-II - 2024 (3) TMI 1231 - CESTAT Chandigarh M/s Sikri Multiplex Cinema (P) Ltd. vs. Commissioner of CGST, Ludhiana - 2024 (6) TMI 582 - CESTAT Chandigarh-LB SJS Healthcare Limited v. Commissioner of Central Excise & Service Tax, Ludhiana - 2024 (4) TMI 300 - CESTAT Chandigarh Aashlok Nursi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in Section 65(104c) of the Act. She submits that in the impugned order, the department has confirmed the demand of service tax under the head BSS alleging that the appellant is rendering infrastructural support services to DSPs as the appellant provided space on its premises and other amenities such as security, housekeeping, air conditioning, internal intercom lines, garbage disposal etc to DSPs to enable them to provide diagnostic services. 4.8 She also refers to the definition of "Infrastructural Support Services" to show that the said definition seeks to include services, for example, office utilities like intercom services, ensuring proper response to visitors and other facilities attached to the office. Hence, these services are required to be provided within the office. She submits that in the instant case, the appellant has allowed DSPs to set up their equipments in its premises and provides basis amenities like security, intercom, housekeeping etc to DSPs in order to provide the diagnostic services to the patients coming to the hospital. The appellant directly charges the patients and share the revenue with DSPs in agreed ratios. Further, the basic amenities such as wat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he healthcare services provided by the appellant are not exigible to service tax. 4.12 As regards extended period of limitation, the ld. Counsel submits that the appellant has not suppressed any material facts from the department and the earnings of the appellant from the revenue sharing model agreed with DSPs was recorded in the balance sheets and the department was in the knowledge of the same. Further, the appellant was under a bona fide belief that it is not liable to pay service tax under BSS. The present case also involved the interpretation of complex issues; hence, extended period of limitation cannot be invoked. In this regard, she places reliance on the following decisions: The Commissioner, Central Excise and Customs and Anr. vs. M/s Reliance Industries Ltd. and Commissioner of Central Excise and Service Tax vs. M/s Reliance Industries Ltd. - 2023-TIOL-94-SC-CX Mahanagar Telephone Nigam Ltd. vs. Union of India and Ors. - 2023-TIOL-407-HC-DEL-ST 4.13 As regards the demand of interest and penalty, the ld. Counsel submits that when the demand of service tax itself is not sustainable, then the question of interest and penalty does not arise. 5. On ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h competent personnel to handle messages, secretarial services, internet and telecom facilities, pantry and security;] Section 65(105)(zzzq) : to any person, by any other person, in relation to support services of business or commerce, in any manner;" 7. Further, we have also seen the terms and conditions of various agreements entered into by the appellant and the various DSPs, which are produced on record. All the agreements provide in details the revenue sharing between the parties out of the total receipts collected from the patients for all the tests conducted by the DSPs. The department entertained the view that the infrastructural support service provided by the appellant to various DSPs is tantamount to the service under "Support Service of Business or Commerce" and therefore, the appellant is liable to pay service tax on that. Further, perusal of the agreements between the parties clearly shows that the contracts between the appellant and various DSPs are on principal-to-principal basis and are in the nature of sharing-revenue. As per the contracts, the appellant is required to provide infrastructure and DSPs are required to install their equipments; and the rev....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tuated inside the hospital premises." The perusal of above clauses reveals that there is absolutely no stipulation of payment of any service charges by the DSPs to the appellant and the contract is purely for sharing of revenue. 8. We also find that the Circular No. 109/03/2009-ST dated 23.02.2009 relied upon by the appellant also recognizes that the transactions between two contracted parties on principal-to-principal basis are not to be treated as service. Though the circular was issued in context of levy of service tax on movie theaters, but the context is applicable in the present case also, because in the present case, the appellant and the DSPs are dealing with each other on principal-to-principal basis. 9. We also find that as per the terms of the contracts, the appellant has allowed the DSPs to install their equipments and machines and operate their respective centers in the hospital. In fact, diagnostic services are provided by the Hospital through the patients using the expertise and machinery of the DSPs. All reports of such diagnostic services are issued under the name of the Hospital. Further, the billing of such services is also done by the appellant"s Hospit....