AI Drafter 
TaxTMI 
TaxTMI 
2025 (12) TMI 456
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.... Rs 10,000/- each under Section 77(1)(a) and Section 77(2) of Finance Act, 1994. 2.1 Briefly stated, the facts of the case are that the during the verification of accounts, it was found that the appellants have received certain amounts on provision of services as described in Para 1 for the period from 2007 to 2012 and have not paid service tax for the amounts received in respect of the above services. Hence, a Show Cause Notice No. 23/2012-ST dated 19.10.2012 was issued. The Joint Commissioner of Central Excise, Madurai Commissionerate after due process of law vide Order-In-Original No. MAD-CEX-000-JTC-043/2013 dated 30.09.2013 have confirmed the demand with interest and imposed penalties under various provisions of the Finance Act, 1994 as mentioned in Para 1 above. 2.2 Being aggrieved, the Appellant filed an Appeal before the Commissioner (Appeals) Madurai and after due process of Law, the Appeal was rejected. 2.3 Once again aggrieved, the Appellant is before this Tribunal in Appeal. 3. The Ld. Advocate Mr. Joseph Prabhakar, appeared for the Appellant and the Ld. Authorized Departmental Representative Mr. Anoop Singh, appeared for the Respondent who presented their a....
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....rom clauses of MOU. The fact remains that AEH is not running Hospitals at Amethi or Kolkata but IGEHRC/MPBNEC are running Hospitals respectively. Further, Assessee's reliance on Education Guide dated 20.06.2012 and cited Case laws on subject matter will not help them since they are neither a Departmental Circular nor a Manual of Instructions. 4.6 The Para 28 of Order-in-Appeal clearly brings out fact that there is an agreement, there has been services for agreed consideration, they have raised Bills also, considerations have been received and therefore, ST is leviable. Further, it appears that Assessee is trying to make an afterthought and unclear arguments in terms of classifying received consideration as Reimbursement or Royalty Income and has not substantiated what they call Reimbursement at this stage in terms of MOU or submissions before lower Authorities, It has to be checked Bill/Invoice wise since they have wrongly reflected the same as. Royalty Income in their Book of Accounts. 4.7 The issue of extended period has been discussed and justified as the Appellant didn't even file any return for the period from 2007-8 to 2009-10 and has taken registration belatedly on 09.....
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....supply/secondment of manpower, commercial training/ coaching of doctors/staff which are taxable under service tax law for the said period as per the details obtained from the Appellant. 8.4 The Appellant took a stand that the services are bundled together and that they are not offering any single service as a standalone service as that is not in their line of business. They relied upon the CBEC education guide issued in 2012 in the context of negative tax regime i.e. after 01.07.2012, wherein the concept of bundled service was introduced for the first time and also health service is under the Negative list of services. They have cited that CBEC guide is just like any Circular offering clarifications and therefore applicable for the past period also and is binding on the officers but however this plea was rejected in Adjudication which was also upheld in appeal as it pertained to clarifications of services after 1.7.2012 and the period of dispute is well before that i.e. positive service tax regime. 8.5 We find that the Education Guide was released to assist taxpayers, tax administrators, and practitioners in understanding the new service tax regime introduced, as amended by t....
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....e appellant Aravind Eye Hospital is a charitable hospital / trust which entered into two Memorandum of Understanding (MOU) with Hospital M.P. Birla Priyamvada Hospital and Indira Gandhi Eye Hospital to establish and set up world class facilities in eye care as per WHO policy document guidelines. The financial terms of both the Hospitals as per MOU are Tabulated below. Sl. No. Category of service M.P.Birla Nethralaya (in Rs.) Indira Gandhi Eye Hospial & Research Centre (in Rs.) 1 Revenue from patients by the Hospital to AEH (Management Fee) 3.5% of revenue from patients 5% of patient revenue 2 Training Fees paid to AEH For Doctors RS 10,000 pm, other staff Rs 5000 pm 3 Salary of staff deputed by AEH Will be reimbursed to AEH Wil be directly paid to deputed staff 4 One time salary as opportunity cost for 3 above Will be reimbursed to AEH Fixed as equal to gross salary 5. Travelling and local expenses At actuals Will be paid directly to deputed staff 6 Outstation allowance Doctors Rs 7000, Sr Staff Rs 2000, Jr and other staff Rs 1250 pm Will be paid directly to deputed staff 7. Interaction....
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....ritable Trust i. AEH shall decide the building plan and the hospital layout along with RGCT. ii. AEH shall send key staff members consisting a Manager, IT person and supportive paramedics. h) Except the Manager and IT person sent by AEH, the remaining staff members shall be rotated by AEH. Al! the Training and development activities for doctors, paramedics and other supportive staff will be done at Aravind Eye Hospital. iii. In consensus with RGCT, AEH shall buy all the instruments and equipment needed for Indira Gandhi Eye Hospital. iv. Indira Gandhi Eye Hospital shall be a replica of Aravind Eye Hospital in terms of systems, work flow, records and registers and AEH shall design and finalize the forms to be used in Indira Gandhi Eye Hospital. v. The supplies like lenses, medicines to he used in the Indira Gandhi Eye Hospital and Research Centre will be supplied from Aravind Eye Hospital at the cost of Indira Gandhi Eye Hospital. AEH has every right to decide the suppliers for lenses, Medicine and other stationeries used in Indira Gandhi Eye Hospital. vi. ABH shall conduct periodical meeting with the staff members of Indira Gand....
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....the P & L accounts of the appellants. Hence, the arguments put forth by the appellants do not find any merit as it is devoid of any proof to substantiate their Claim. In view of the above, the argument of the appellants is not accepted." Based on the same, the department rejected the plea of managing the hospital and that it was the MOU Hospital that was managing the same as the Appellant has not produced any evidence. 8.15 On perusal of the MOUs between the parties clearly shows that the contracts between the appellant and various Hospitals are on principal-to-principal basis and are in the nature of sharing-revenue. As per the contracts, the appellant is required to provide Knowhow and manpower and the MOU Hospitals will provide infrastructure and funds and will be part of the Joint management. The revenue earned from the patients is shared between the appellant and the MOU Hospitals and no taxable service is being provided by the appellant to other hospitals. There is absolutely no stipulation of payment of any service charges by the MOU Hospitals to the appellant and the contract is purely for sharing of revenue. 8.16 As per Para 2.2 of CBEC Circular No. 109/03/2009-ST....
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....oses of this chapter, classification of taxable services shall be determined according to the terms of the sub-clauses (105) of section 65; (2) When for any reason, a taxable service is prima facie, classifiable under two or more sub-clauses of clause (105) of section 65, classification shall be affected as follows: (a) the sub-clause which provides the most specific description shall be preferred to sub-clauses providing a more general description; (b) composite services consisting of a combination of different services which cannot be classified in the manner specified in clause (a), shall be classified as if they consisted of a service which gives them their essential character, in so far as this criterion is applicable; (c) when a service cannot be classified in the manner specified in clause (a) or clause (b), it shall be classified under the sub-clause which occurs first among the subclauses which equally merits consideration;" 8.21 The Appellant submitted that the activity performed by them in terms of the MOU has to be analysed in terms of clause (b) of Sub Section (2) of Section 65A of the Finance Act, 1994. We find as per this Clause....