TaxTMI 
TaxTMI 
2025 (6) TMI 767
X X X X Extracts X X X X
X X X X Extracts X X X X
....x of Rs. 11,61,86,746/- (Rupees Eleven Crores Sixty One Lakhs Eighty Six Thousand Seven Hundred and Forty Six only) from M/s.Medall Healthcare Private Limited under Section 73(2) of the Finance Act, 1994. (ii) I demand interest at appropriate rates under Section 75 of the Finance Act 1994, on the amount demanded (i) above. (iii) I drop the demand of late fee of Rs. 24,300/- for belated filing of returns for the reasons mentioned supra. (iv) I impose a penalty of Rs. 11,61,86,746/- (Rupees Eleven Crores Sixty One Lakhs Eighty Six Thousand Seven Hundred and Forty Six only) on M/s.Medall Healthcare Private Limited under Section 78 of the Finance Act 1994. 23. The penalty imposed in clause (iv) above shall be reduced to 25%, if the service tax in clause (i) above along with interest demanded at clause (ii) above are paid within thirty days from the date of receipt of this order. The benefit of reduced penalty under this proviso shall be available only if the amount of such reduced penalty is also paid within thirty days from the date of receipt of this order." 2A. Relevant portion of the Show Cause Notice dated 26.06.2020 issued to the Petitioner demanding service tax is extra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n of Certain Provisions) Ordinance, 2020 and without any prejudice to any other action or further action or proceedings, which may be initiated against them under the provisions of Finance Act, 1994 or the Rules made there under or under any other Law for the time being in force in India." 3. Although the Petitioner has an appellate remedy before the Appellate Tribunal, yet, the petitioner had opted to file this Writ Petition primarily on the ground that the Petitioner was not liable to pay tax under the provisions of Finance Act, 1994 as it stood amended w.e.f. 01.07.2012. 4. The case of the Petitioner is that the service provided by the Petitioner was exempted in terms of Clause 2(i) of Service Tax Mega Notification No.25/2012-ST dated 20.06.2012. Therefore, it is submitted that the conclusion arrived in the impugned order was incorrect. Clause 2(i) of Service Tax Mega Notification No.25/2012-ST dated 20.06.2012 is extracted hereunder: "2. (i) Health care services by a clinical establishment, an authorised medical practitioner or para-medics." 5. The Petitioner had signed a Franchise Agreement dated 17.12.2015 with M/s.Pranav Labs, a partnership firm from the state of Andhra....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... after adjustment. Hence, it is submitted that it cannot be said that the Petitioner had provided service to the Franchisee/M/s.Pranav Labs. 10.1. It is submitted by the learned counsel for the Petitioner that there are three steps involved in the testing. Firstly, samples are directly collected by the laboratory manned by Franchisee/M/s.Pranav Labs. Secondly, analysis is also carried out by Franchisee/M/s.Pranav Labs using the testing equipments supplied by the Petitioner. Finally, analysis results were to be forwarded to the Petitioner by the Franchisee/M/s.Pranav Labs. Thereafter, the test report was generated by the Petitioner and transmitted to Franchisee/M/s.Pranav Labs for being directly given to both private patients as well as to the patients referred by the Government Hospital viz., Primary Health Centers (PHCs), Community Health Centers (CHCs), Area Hospitals (AHs) and District Hospitals (Dhs). Threfore, it is submitted that there is absolutely no scope for infering suppression of facts to warrant invocation of extended the period of limitation under Section 73 of the Finance Act, 1994. 10.2. The learned counsel for the Petitioner also submitted that the entire service....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nts failed to see that the date of knowledge becomes wholly relevant for reckoning the extended period of limitation, only when suppression has been proven and has been established by the Department and not otherwise. 10.7. It is submitted by the learned counsel for the Petitioner that the decisions relied upon by the Respondent is not applicable to the facts of the present case, wherein, the Department has not established or proven suppression. The case in Tata Consultancy Services Limited Vs. C.S.T.Delhi 2018 (18) G.S.T.L. 478 and CMC Ltd. Vs. CCE, Hyderabad 2011 (23) S.T.R.586 (Tri.Bang.) relied upon by the Respondents herein in their Counter Affidavit is based on the different set of facts and is not at all applicable to the case on hand. 10.8. It is submitted by the learned counsel for the Petitioner that the reckoning of date of knowledge which has been propounded by the Hon'ble Supreme Court is only in the context of 'proven suppression'. In other words, the Department has to positively and categorically establish that there has been suppression of facts or fraud or collusion on the part of the assessee and a mere omission or a mere statement that there has bee....
X X X X Extracts X X X X
X X X X Extracts X X X X
....chisee/M/s.Pranav Labs and also, the Petitioner company was entitled to adjust the same against all sums payable by Franchisee/M/s.Pranav Labs to its company, including sums payable under or in pursuance of the Franchisee's indemnity obligations contained in the Franchise Agreement. Therefore, it is submitted that the Impugned Order does not merit any interference. 11.3. The learned Senior Standing Counsel further submitted that there is absolutely no scope for concluding that there is suppression of facts. Even if the activity carried out by the Petitioner was exempted from payment of tax, the Petitioner should have made adequate declarations in its Form ST-3 returns. That apart, in this case, there has been no attempt made by the Petitioner to declare the value which was considered in the Impugned Order as exempted from payment of tax. 11.4. Moreover, it is submitted by the learned Senior Standing Counsel for the Respondents there are several disputed questions of facts which need not to be escalated to the jurisdiction of this Court under Article 226 of the Constitution of India. Hence, the learned Senior Standing Counsel for the Respondents prays for the dismissal of this....
X X X X Extracts X X X X
X X X X Extracts X X X X
....State of Andhra Pradesh. This service has been outsourced from the Franchisee/M/s.Pranav Labs. 17. In Clause 1 of the Franchise Agreement dated 17.12.2015 contains the definition for the expressions viz., "Branding Guidelines", "Center Specifications", "Government Hospitals", "Collection Centres", "Franchise Fee", "Franchise Guidelines", "Franchisee's Fee for Services" and "Standard Equipment". These definitions from the Franchise Agreement dated 17.12.2015 are extracted below:- 1. "Branding Guidelines" shall mean the guidelines governing signage and branding. These are set forth in Schedule 4 below. 2. "Centre Specifications" shall mean the specifications to be met by a place to qualify as a Franchise Premises. These are set forth in Schedule 7 below. 3. "Government Hospitals" means all the Government Hospitals namely, PHC, CHC, DH and AH located within the Territory. 4. "Collection Centres" shall mean the collection centres referred to in Schedule 3. 5. "Franchise Fee" means the fees as set out in Schedule 8. 6. "Franchise Guidelines" shall mean those guidelines governing the operations of the franchise. These are prescribed in Schedule 5. 7. "Franchisee's ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....R SERVICES 1 Rs.141/- (60%) of the Rs. 235/-) per sample will be paid to the Franchisee for each of the sample collected and processed irrespective of the no. of tests in a sample, for each of the approved sample collected from any Government Hospitals in PHC's or CHC's or AH's or DH's. 2 68.80% of the Standard Tests revenue will be paid to be Franchisee. 3 50% of the Other tests revenue will be paid to the Franchisee. 22. The Franchiser rights and obligations have been clearly stated in Sub-clause 5.5 to Clause 5 of the Franchise Agreement dated 17.12.2015 which is also extracted below:- "5. FRANCHISOR RIGHTS AND OBLIGATIONS: 5.5. Franchisor shall have a right of set-off over all sums payable by Franchisor to Franchisee under this Agreement and shall be entitled to adjust the same against all sums payable by Franchisee to Franchisor, including sums payable under or in pursuance of the Franchisee's indemnity obligations herein contained." 23. The sub-clause 3.4 to Clause 3 of the Franchise Agreement dated 17.12.2015 itself contemplates that the Franchisee/M/s.Pranav Labs has to obtain the Standard Equipment for the Franchise Premises only from the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y but no service tax has been paid by the Petitioner as if the entire service was exempted in terms of Clause 2(i) of the Service Tax Mega Notification No.25/2012-ST dated 20.06.2012 which came into effect from 01.07.2012 as amended from time to time which has been extracted in Part I of this Order. 29. Section 65(105)(zzzzj) to Chapter V of the Finance Act, 1994 is reproduced hereunder: "65(105)(zzzzj). to any person, by any other person in relation to supply of tangible goods including machinery, equipment and appliances for use, without transferring right of possession and effective control of such machinery, equipment and appliances." 30. However, after 01.07.2012 till 13.06.2017 which includes the period in dispute between January, 2016 - June, 2017, such supply of tangible goods is taxable under Section 66B r/w. 66D(a) of the Finance Act, 1994 as inserted by the Finance Act, 2012 w.e.f. 01.07.2012 and in view of Section 66BA of the Finance Act, 1994 as inserted by the Finance Act, 2013. 31. However, there are no indications that the amounts for the aforesaid services were separately charged under the Franchise Agreement, even though Clause 3.4 & Clause 5.5 of the Franchi....