TMI Blog2019 (6) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided or to be provided by him. - After 1st July 2012, the term service has been defined in Section 65B (44) of the Act to mean inter alia, that any activity carried out by a person for another for consideration. In the present cases, admittedly the appellants-hospitals did not charge the doctors at all. There is no payment by the doctors to the hospital and therefore, no consideration is received by the hospitals from the consultant doctors. Thus, in absence of any consideration being received, no service tax is required to be paid by the hospitals. On perusal of the contracts, it is found that there is no privity of contract between the doctors and the patients and the patients are under no obligation to pay any amount to the doctors. The billed amount paid by the patients is reflected as the income of the hospitals alone in the books of accounts and the doctors are paid for the amount as per the contractual norms, on which the hospitals deduct the tax at source under the income tax statute. Further, also the department has not brought on any evidence to show the nature of support services provided by the hospitals to the doctors - Hence, is absence of any specific all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER Per: S.K. MOHANTY The issue involved in these appeals is identical and accordingly, same are taken up for hearing together and a common order is being passed. 2. The issue involved in these appeals for consideration, relates to the leviability of service tax under the category of Support Services for Business or Commerce (BSS) as defined under Section 65(104c) read with Section 65(105)(zzzq) of the Finance Act, 1994 up to 01.07.2012 and under Support Services , as defined vide Section 65B(49) of the Act from 01.07.2012 onwards, on the difference of amount charged by the appellants-hospitals to the patients towards doctors consultation and the charges paid by them to the visiting/consulting doctors. 3. The facts involved in these appeals, in brief are as under:- 3.1. The appellants run hospitals for providing healthcare and other related services to their patients. Such services are provided through two departments, viz. In-Patient Department (IPD) and Out-Patient Department (OPD). In case of IPD, patients are admitted in the appellants hospitals; whereas, in case of OPD, the patients ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd of service tax along with interest and for imposition of penalties. The show cause notices were adjudicated by the jurisdictional commissioners of service tax wherein, the proposals made in the SCNs were confirmed. The adjudged demands were confirmed, mainly on the ground that out of the billed amount collected from the patients, the appellants-hospitals paid certain percentage as professional fees to the doctors and retained the balance amount on account of providing facilities, space/infrastructure etc., to the doctors, enabling them to carry out their professional activities. Thus, it was contended by Revenue that the services provided by the appellant-hospital should fall under the scope and ambit of taxable service under the category of BSS/Support service and the appellants should be liable to pay service tax thereon. 3.4 Being aggrieved with the adjudication orders (for short, the impugned orders ); the appellants-hospitals have preferred these appeals before the Tribunal. Further, Revenue has also filed appeals against the impugned orders, wherein the adjudicating authority has dropped proceedings initiated for demand of service tax on use of hospital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnataka High Court in the case of CIT vs. Herekar's Hospital Maternity Home - (1991) 192 ITR 525 (Kar) and the Hon'ble Gujarat High Court in the case of CIT vs. K.K. Shah - (1982) 135 ITR 146 (Guj.). 4.4 The Learned counsels also assailed the impugned orders on the ground that extended period of limitation cannot be invoked for confirmation of the adjudged demands, beyond the normal period. 5. On the other hand, the Learned ARs appearing for the Revenue reiterated the findings recorded in the impugned order and further submitted that the ratio of the decision of coordinate Bench of this Tribunal, in the case of Sir Gangaram Hospitals Ors. (Supra) would not be applicable to the facts and law involved in these cases, for the following reasons:- 5.1 In Sir Gangaram's case, the contract clearly brings out that the relationship between the appellants-hospitals and doctors was that of master and servant; whereas, in the present cases, the relationship between the doctors and hospitals is a business relationship, where the doctors are not paid any money by the hospitals, but are required to pay the hospitals for every facilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oks of accounts and the doctors are paid for the amount as per the contractual norms, on which the hospitals deduct the tax at source under the income tax statute. Further, we also find that the department has not brought on any evidence to show the nature of support services provided by the hospitals to the doctors. Hence, is absence of any specific allegation and discussions with any supporting evidence regarding the type of support services provided and the amount received on such account by the hospitals, service tax demand cannot be fastened on the hospitals under the taxable category of BSS/Support Services. 8. Learned Counsels appearing for the appellants-hospitals strenuously argued that the issue arising out of the present dispute is no more open for any debate, both on facts as well as on law, in view of the decision of the co-ordinate Bench of this Tribunal in the case of Sir Gangaram Hospital (supra).On the contrary, Revenue has contended that the ratio of said decision of Tribunal is not applicable to the facts of the present case. For the sake of clarity and for ascertaining the applicability of the said decision to the facts of the present cases, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he present adjudged demands confirmed on the hospitals cannot be sustained. Further, it is an admitted fact on record that Revenue has not filed any appeal against the order of the Tribunal passed in the case of Sir Ganga Ram Hospital (supra). Thus, it is evident that the said order has attained finality and the findings recorded therein cannot be disturbed for deciding identical issues, involved in the present cases differently. 10. Revenue has raised the question of law, as to whether doctors are engaged in the business/profession so that the services provided by the hospitals can be covered in the scope of the definition of support services. In this context, the Learned AR for the Revenue, in his written submission dated 26.11.2018, has stated that the Tribunal in the case of Sir Gangaram Hospital (supra) has relied upon the judgment of Hon ble Gujarat High Court in the case of Dr. K.K. Shah (supra) to hold that there was no tax liability on BSS in the facts and circumstances of the case. It has further been stated that the said decision of Tribunal is per incuriam in as much as the judgment in the case of Dr. K.K. Shah relied upon therein was delivered prior to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2014 and 10.07.2014 respectively have declared the amendments incorporating medical practitioners within the definition of commercial establishments as ultra vires and struck down the same. In view of the above settled position of law, it cannot be said that the doctors are engaged in the activities of providing business/profession, in order to fall within the purview of the definition of taxable service under the category of BSS/Support Services. 11. In order to arrive at a definitive conclusion on the taxability of service, the main ingredients which need to be necessarily present, as per this statute, are the service, service provider, service receiver and the consideration for the service. In the instant case, the alleged service provider is undoubtedly the hospitals/ institutions; the service rendered is to the patients; remuneration is received by the hospitals/institutions and is paid by the patients. Understandably, the services rendered by the hospitals/institutions are at best medical services to the patients and by no stretch of imagination Business Support Services . It is immaterial that the hospitals are paying a portion of the remuneration received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al till they leave the premises. ID cards are provided, records are maintained, all the supporting assistance are also provided when the patients are in the appellant hospital premises. The appellant hospital also manages the follow-up procedures and provide for further health service in the manner as required by the patients. As can be seen that the appellants hospitals are actually availing the professional services of the doctors for providing health care service. For this, they are paying the doctors. The retained money out of the amount charged from the patients is necessarily also for such health care services. The patient paid the full amount to the appellant hospitals and received health care services. For providing such services, the appellants entered into an agreement, as discussed above, with various consulting doctors. We do not find any business support services in such arrangement. 7. The inference made by the Revenue that the retained amount by the hospital is to compensate the infrastructural support provided to the doctors can be examined in another angle also. Reading the statutory provisions for BSS, we note that the services mention ..... X X X X Extracts X X X X X X X X Extracts X X X X
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