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2015 (11) TMI 977 - CESTAT BANGALORE

2015 (11) TMI 977 - CESTAT BANGALORE - 2015 (40) S.T.R. 829 (Tri. - Bang.) - Demand 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 va .....

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nd 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 au .....

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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. - ST/479/2008-DB, ST/487/2008-DB - Final Order No. 21265-21266 / 2015 - Dated:- 25-5-2015 - Shri G. Raghuram, President And Shri B.S.V.Murthy, Technical Member For the Petitioner : Shri G. Natarajan, Advocate For the Respondent : Shri L. Dandem, Authorised Representative ORDER Per : B.S.V. MURTHY M/ .....

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tax on the consideration received. Accordingly proceedings were initiated and after completion of due process, demand for service tax of ₹ 2,15,63,970/- with interest was confirmed for the period from August 2002 to March 2006. An amount of ₹ 16,29,562/- was demanded towards BAS from August 2002 to March 2006. 2. There is no dispute about confirmation of demand for service tax on Insurance Auxiliary Service and the entire amount of tax along with interest has been paid and it is the .....

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partment that this amount from the hospitals is liable to tax under the head discounts. 4. It was submitted by the learned counsel that this service cannot be considered as insurance auxiliary service. The period covered in the show-cause notice is upto March 2006 and during the relevant period, the definition of insurance auxiliary service means  any service provided to a policy holder or insurer by an actuary or an intermediary or insurance intermediary or an insurance agent in relation to in .....

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ind this submission to be valid since the service provided to insurer or policy holder was only liable to tax prior to 01/05/2006. 5.1. The nex demand has arisen on the ground that amounts received as healthcare receipts/self-funded schemes are liable to tax as BAS. The healthcare receipts is the amount received for service provided by the appellants to corporate clients such as advise, monitoring, implementing, verifying claims received from the hospitals and submitting various reports to the c .....

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arnataka can get the necessary treatment and for an access to the expensive medical procedure by becoming member of the scheme. The scheme was initiated by Narayana Hrudayalaya, implemented by the Govt. of Karnataka and the appellant was the implementing agency. 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 ev .....

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orking hospitals, processing the request of hospitals for pre authentication, proposed course of treatment, liaisoning with hospitals for smooth implementation of scheme, verifying claims received from hospitals and arranging payments/remittances etc. Further the perusal of the agreement entered in to with Yeshaswini Co-operative Farmers Health Care Scheme (Yeshaswini) makes it clear that according to which M/s.Health, inter alia, are required to maintain data to beneficiaries, assist to issue i .....

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the services rendered and discussed above can be treated as taxable services as envisaged under clause (iii) and (vii) of the BAS. For better appreciation, the definition of BAS is reproduced below: Business Auxiliary Service means any service in relation to, - i) .. .. ii) . . iii) any customer care service provided on behalf of the client; or iv) . . v) . vi) . vii) service incidental or auxiliary to any activity specified in sub-clause (i) to (vi), such as billing, issue or collection or rec .....

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Yeshaswini scheme, any member of any co-operative society in the State of Karnataka can become a member of the scheme. None of the parties viz. Govt. of Karnataka or the Trust is doing any business. It cannot be said that members are clients of the Trust or buyers of any service from the Trust. It cannot be said that appellant has provided customer care service or provided service on behalf of the Trust or Govt. of Karnataka. This is a self-funded scheme and the expenses are met from the contrib .....

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