By TIOL News Service

BANGALORE, AUG 07, 2018: THESE are appeals filed by the department.

The respondents are engaged in running resorts wherein they are providing services which the department claimed to fall under "health club and fitness centre".

The demand(s) of service tax was/were confirmed by the original authority but set aside by the Commissioner(A).

The respondents contended that they are operating ayurvedic treatment centres at the respective resorts; have licenses issued by the governmental authorities to operate the said ayurvedic centre as private hospital establishment; they operate the ayurvedic centre with full time qualified ayurvedic doctors and qualified staff for giving the treatment.

Reliance is placed by the respondent on the CBEC Circular No. B11/1/2002-TRU dated 1.8.2002 to submit that it is clarified that 'therapeutic massages' falls outside the purview of ‘health and fitness service'; that only if the massage is performed without any medical supervision or advice, the massage can be qualified for general well-being. However, such a situation does not arise in respect of the respondents as the treatment processes commence only after the consultation with the ayurvedic doctor and the treatment is carried by expert masseurs under the supervision of the doctor. The ground of the demands being hit by limitation is also taken.

The AR reiterated the grounds taken in the order passed by the original authority and also submitted that the respondents are providing ayurvedic rejuvenation and therapeutic health packages and the payments are higher during certain periods; the resorts have certificates issued by Department of Tourism which shows that the purpose of centre is to promote tourism, therefore, the ayurvedic rejuvenation and therapeutic packages provided by the respondents come under the category of 'Health Club and Fitness Centre' and, therefore, are liable to service tax.

The Bench considered the submissions and after extracting paragraphs 2 & 3 of the said TRU letter inter alia observed -

++ The department has attempted to contradict the claims of the respondents by saying that these resorts are only for pleasure and holidaying and massages are optional and invariably are of general well-being than treatment of a particular disease. However, ongoing through the records maintained by these ayurvedic centres, it is seen that they are maintaining case-sheets/treatment files and the treatment process schedule which is a normally done by hospitals also. By the mere fact that the ayurvedic centres are located in the premises of the resorts, it cannot be said that they cease to be ayurvedic centres …

++ In view of the clear findings of the Commissioner (A) and the documentary findings produced by the respondents, it is seen that the ayurvedic centres are providing therapeutic treatment under ayurvedic system. Going by the mere fact that the centres are located in the resorts and sometimes the duration of treatment is for one or two days, it cannot be concluded that the massages or treatments offered by these centres are only for general well-being and not for any therapeutic value.

++ We fail to understand as to how the cost of treatment and the ambience of the treatment would render such treatments to be non-therapeutic and only for well-being.

++ It is not always necessary that the treatment should be only in the dull / dreary atmosphere of hospitals alone. If some well to do patients prefer to have treatment in a better circumstances and are willing to pay for the same, such treatments cannot be 'for that sole reason', held to be no treatment.

++ What is important is whether such treatments are given by a qualified Doctor/Doctors and whether the procedures are prescribed under therapeutic texts. It is not the department's contention that the massages and panchakarma and other treatments provided by the respondents are not mentioned in ayurvedic texts.

++ Such ayurvedic centres are licensed to function as ayurvedic centres by the respective authorities. Therefore, we find that all the required conditions for such treatments to be treated as therapeutic are specified and will fall under the exclusion provided by the Board Circular cited above.

Concluding that there is no reason to interfere with the orders of the Commissioner(A), the appeals filed by the department were rejected.