TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 1709
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....nt providing health care services at Panchasayar, Kolkata, West Bengal. Neurosciences Foundation is a charitable organization. The appellant and Neurosciences Foundation, as a joint project, formed a non-profit organisation "National Neurosciences Centre, Calcutta" ("NNC" for short), with the objective of providing a centre of excellence in neurosciences for the benefit of the public at large. NNC was registered as a society under the West Bengal Societies Registration Act, 1961. NNC's Memorandum of Association provided that its income and properties shall be applied solely towards the promotion of the society and no portion thereof shall be paid or divided amongst any of its members by way of profits. NNC was also registered as a charitable institution under section 12A of the Income Tax Act, 1961 and its income was not charged to income tax. 3. In terms of the agreement dated November 29, 2007, representatives of both the appellant and Neurosciences Foundation were equally involved in the management of NNC. NNC functioned at the hospital premises of the appellant and used its infrastructure like beds, operation theatres, etc. as also staff like nurses, sevikas, technicians and o....
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...., clinic, sanatorium or any other institution by, whatever name called, that offers services or facilities requiring diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India, or a place established as an independent entity or a part of an establishment to carry out diagnostic or investigative services of diseases;" "(t) 'health care services' means any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India and includes services by way of transportation of the patient to and from a clinical establishment, but does not include hair transplant or cosmetic or plastic surgery, except when undertaken to restore or to reconstruct anatomy or functions of body affected due to congenital defects, developmental abnormalities, injury or trauma;" (iii) Serial No.2 of the notification granted exemption in respect of "healthcare services by a clinical establishment". The notification ensured that medical treatment did not become costlier because of service tax. (iv) There can be no dispute that the patients were admitte....
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....ervices" includes providing office along with office utilities, lounge, reception with competent personnel to handle messages, secretarial services, internet and telecom facilities, pantry and security;". (emphasis added) (vii) In order to fall within the above definition, the infrastructural support service must be "in relation to business or commerce". Admittedly, NNC is a non-profit making organisation. It is registered as a society under the West Bengal Societies Registration Act, 1961 and as a charitable institution under section 12A of the Income Tax Act, 1961. NNC's memorandum of association stipulates that its income and properties shall be applied solely towards the promotion of the society and no part thereof shall be paid or divided amongst any of its members by way of profits. In such circumstances, it cannot be said that NNC was carrying on any business or commerce or that by allowing use of its hospital infrastructure the appellant rendered any service in relation to business or commerce. It has been held by this Tribunal in several cases that where the recipient is a non-profit making organisation and is not involved in any business or commerce, any service rendere....
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....notice without justifying the quantum of demand. (iii) It is submitted that benefit of the concessional price charged by the vendors from the appellant's employees, its contractors' employees and doctors was enjoyed by the said persons and did not constitute any part of the consideration for renting of immovable property service provided by the appellant. It is not the case that the appellant paid any lower remuneration to such employees or contractors or doctors because of the concession extended to them by the vendors. The appellant was under no obligation to pay any additional amount to any such employee or contractor or doctor if the vendors did not provide then the concession. The Ld. Commissioner should have accepted the appellant's service tax payment of Rs.1,30,020 with interest with reference to 20% sale proceeds and dropped the rest of the demand of Rs.2,06,275 under renting of immovable property service. Works Contract Service: (i) The audit team found that the appellant had made addition to its buildings and also incurred expenses for repairs and maintenance of buildings and sought to demand service tax of Rs.4,17,329 on works contract service on reverse charge basis....
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....ntent to evade payment of service tax. Penalty of Rs. 10,000 was imposed under section 77 for not obtaining registration at the appropriate time. It is submitted that having regard to the nature of controversy involved in the instant case, it cannot be said that the appellant had any intention to evade payment of service tax or that it withheld any fact from the Department with such intention. The appellant did not obtain registration or pay service tax under the bona fide belief that it was not so liable. The longer period of limitation could not have been evoked and the show cause notice dated April 21, 2014 was barred for the period up to March 31, 2012. (ii) As submitted hereinbefore, the entire demand of Rs. 1,57,73,182 under business support service and manpower recruitment or supply agency service is ex facie not sustainable and there can be no penalty with reference to the same. (iii) The balance demand of Rs.2,06,275 under renting of immovable property service and Rs.31,999 under works contract service is also legally not sustainable and there can be no penalty with reference to the same. (iv) When the audit team raised several issues, the appellant examined the matter ....
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....organisation, namely, National Neurosciences Centre, Calcutta (NNC), with the objective to provide a centre of excellence in neurosciences for the benefit of the public at large. The National Neurosciences Centre was registered as a society whose Memorandum of Association provided that its income and properties shall be applied solely towards the promotion of the society and no portion thereof shall be paid or divided amongst any of its members by way of profits. Further, NNC was also registered as a charitable institution. 10.1. The appellant and NNC have entered into an agreement dated 29.11.2007 whereby NNC functions at the hospital premises of the appellant and uses its infrastructure like beds, operation theatres, etc., as also staff like nurses, sevikas, technicians and other non-medical staff essential for health care services in the field of neuroscience. The agreement provides, inter alia, that NNC would reimburse the appellant bed charges after deducting 10%, 10% of OT charges including fixed charge for consumables and 5% of ITU bed charges billed by NNC as also salaries of nurses, sevikas, technicians and other non-medical staff. 11. On that reimbursement, the Revenue ....
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....e; Ltd. 13.1. It is also an admitted fact that where the vendors supplied food and beverages to the staff of the appellant at a concessional rate, the appellant has not recovered any amount from their employees or doctors on account of the concession given by the service providers, namely, M/s. Coffee Day Express and M/s. Fresh and Honest Café Ltd. The appellant did not receive any amount towards the said concession. In these circumstances, no demand can be raised against the appellant. 13.2. Moreover, it is also a fact that the appellant has not rented out any property to M/s. Coffee Day Express or M/s. Fresh and Honest Café Ltd for any particular amount of rent. 13.3. We also observe that the said issue has already been examined by this Tribunal in the case of M/s. Apollo Gleneagles Hospital Ltd. v. Commissioner of Service Tax, Kolkata [Final Order No. 76702 of 2024 dated 22.08.2024 in Service Tax Appeal No. 75804 of 2014 - CESTAT, Kolkata], wherein it was observed as under: - "Issue No. (3) Renting of Immovable property service and business auxiliary service w.r.t. sharing of revenue with CINRC and ADCPL and parking fees 18,77,322/- 14. We find that the ap....
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....oratories for fee. The agreements laid down conditions by which the testing laboratories and the hospital will contribute their respective shares in the activities, and also the rules for conducting the business. This is not a case of the appellant providing only infrastructural facilities and receiving a income. Thus, it is clearly a case of joint venture in which neither any party renders any service to the other. In this connection, reliance can be placed to the decision of the Tribunal in Mormugao Port Trust." 17. We, therefore, hold that on the amount recovered as Parking Charges and the amount retained by the appellant for MRI and Dental services, the appellants are not liable to service tax under heading "Renting of Immovable Property Service". Accordingly, the demand of Rs.18,77,322/- is dropped. 18. Therefore, Issue No.(3) is also answered in favour of the appellant." 14. In view of the above discussions, we hold that the demand of Service Tax under the category of "renting of immovable property service" is not sustainable. 15. With regard to the demand under the category of "works contract service", the appellant has admitted and paid part of the demand, along wit....