The Ahmedabad bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) has allowed the exemption of service tax for manpower supply to hospitals, emphasizing the importance of not suppressing facts to evade tax payments.
The facts of the case in brief are that M/s D.G. Nakrani ( respondent ) was engaged in providing taxable services such as Cleaning Services and Manpower Recruitment or Supply Agency Services etc. Information received by the DGGI indicated that respondents have provided the taxable services but had not paid the appropriate amount of Service tax on taxable services provided by them. Acting on the intelligence, an inquiry was initiated against the respondent.
Mr. Mihir G Rayka, representing for the Revenue reiterated the grounds of appeals and submitted that the assessee had provided manpower on outsourcing basis to Hospital, Community Health Centers etc. and claimed exemption from payment of Service tax under Sr. No. 25(a) of the Notification No. 25/2012-ST dated 20.06.2012 as amended. As per the agreement with these service recipients i.e. Hospital, Community/ Public Health Centers etc. the respondent has supplied Paramedics and other Class 4 category manpower to these Hospitals, health centers etc.
Mr. Vikas Mehta, representing the respondent submitted that the reasoning followed by the Commissioner is proper and correct. He submitted that it is duly admitted by the department that paramedics supplied by respondents were trained health care professionals who worked in Government Hospitals and public health centers under supervision of medical superintendent and Medical Officers. The service involved in supply of paramedics and other supporting staff to government hospitals, public health centers, etc., has satisfied both the requirements of Sl. No. 25(a) of Notification No. 25/2012-ST dated 29.06.2012 i.e. the service must be provided to Government, a local authority or a governmental authority and the service must be any activity in relation to public health.
The tribunal found strength in the finding of Adjudicating authority that any services provided to government in relation to water supply, public health, sanitation conservancy, solid waste management or slum improvement etc., are exempted from payment of service tax in terms of above mentioned Notification. Also noticed that the concept of categorization of services under Section 65 of the Finance Act, 1994 has been redundant after 01.07.2012. For the exemption of service tax under the disputed entry only two requirements have to be satisfied. First the service must be provided to Government, Local Authority or a Governmental authority and second was the services must be any activity in relation to public health
The coram of Ramesh Nair ( Judicial member ) and Raju ( Technical member ) observed that whether the respondent was entitled for the benefit of the exemption notification or not depends on the interpretation of the exemption notification and on the contrary, to a very large extent, their interpretation is found correct. Thus, it is evident that there was not even an iota of evidence to even suggest that there was any willful misstatement or suppression of facts on the part of the Respondent. Consequently, extended period was not invokable in this case.
Therefore CESTAT does not see any reason to interfere with the impugned order. Accordingly, the impugned order was upheld. Revenue’s appeal was dismissed.
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