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2015 (11) TMI 977 - AT - Service TaxDemand of service tax - Insurance Auxiliary Service - Business Auxiliary Service - Held that:- during the period prior to 01/05/2006, service provided to a policy holder, insurer including reinsurer was only liable to service tax and the amount received by the appellant is for the service provided to the hospitals. Therefore during the relevant appellant was not liable to pay tax at all. We find this submission to be valid since the service provided to insurer or policy holder was only liable to tax prior to 01/05/2006. - Decided in favor of assessee. Whether amounts received as healthcare receipts/self-funded schemes are liable to tax as BAS - Held that:- This is a self-funded scheme and implementation lies with Special Purpose Trust named 'Yeshasvini Trust' of which the appellant is also a part. This is a contributory scheme wherein the beneficiaries contribute a small amount of money every year and beneficiaries were offered cashless treatment in over 135 hospitals in Karnataka. - The service provided by the appellants to corporate clients as submitted is a service limited to the healthcare of the employees of corporate clients. It cannot be said that this service is provided on behalf of a corporate client to the employees. Therefore we agree with the submission that this service is not covered by BAS. - Decided in favor of assessee. Levy of penalty - As regards insurance auxiliary service, the appellants have paid the entire amount with interest and an excess amount of more than ₹ 4.5 lakhs has also been paid before the issuance of show-cause notice. Since they have registered and have been paying the tax and have paid the entire amount before the issue of show-cause notice, according to provisions of Section 73 of Finance Act, 1994, penalty under Section 76 is not imposable. As regards the other two demands amounting to ₹ 16,29,562/-, we have already held that on merits, the demand is not sustainable. Under the circumstances, penalties under Sections 76 or 78 of Finance Act, 1994 is not imposable on the appellant. - Decided in favour of assessee.
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