2025-VIL-49-SC-ST
  1. Home
  2. 2025-VIL-49-SC-ST

SERVICE TAX Supreme Court Cases

Service Tax – Scope of ‘Healthcare Services’, Eligibility of exemption to Stem Cell banking services, Limitation Period - Appellant is engaged in the collection, processing, testing, and storage of umbilical cord blood units and their therapeutic application – Demand of service tax on its services during the period from 01.07.2012 to 16.02.2014 - Whether the services rendered by the appellant, relating to enrolment, collection, processing, and storage of umbilical cord blood stem cells, fall within the ambit of "Healthcare Services" and are therefore, eligible for exemption from payment of service tax for the period between 01.07.2012 to 17.02.2014 – HELD - The services provided by cord blood banks, including preservation of stem cells or any other services related to such preservation, are exempt from service tax, under Entry 2A of Notification No. 4/2014-ST dated 17.02.2014. The later insertion of Entry 2A by Notification No. 4/2014-ST, which specifically exempted services provided by cord blood banks, is clarificatory in nature and must be applied to the appellant's pending claims and existing disputes – Further, the appellant's services are preventive and curative in nature and encompass diagnosis, treatment, and care. The processing, testing, cryopreservation, and eventual release for transplantation constitute integral components of healthcare aimed at future diagnosis, treatment, and care – Though the Department contends that the appellant’s services were exempted only from 17.02.2014 under Entry 2A of Notification No. 4/2014-ST, however, the insertion of Entry 2A does not curtail the scope of Serial No.2 under Notification No. 25/2012-ST. The absence of express inclusion of cord blood services in earlier notifications does not alter their essential healthcare nature. Therefore, the appellant’s services are well within the ambit of “Healthcare Services” - Furthermore, the Ministry of Health and Family Welfare had clarified that stem cell banking is a part of "healthcare services" and qualifies for exemption. Accordingly, the appellant's services are held to be eligible for exemption from service tax during the disputed period - the impugned order is set aside and the appeals are allowed - Whether the show cause notice issued by the department was barred by limitation – HELD - the invocation of the extended period of limitation under Section 73 of the Finance Act, 1994 is unwarranted as there was no fraud, collusion, wilful misstatement, or suppression of facts with an intent to evade payment of service tax. Mere non-payment of service tax, by itself, does not justify the invocation of the extended limitation period. Accordingly, the show cause notice issued by the Department is time-barred - Whether the imposition of penalties and interest on the appellant was justified – HELD - The imposition of penalties was not warranted as the appellant neither suppressed nor concealed any material facts from the Department. The appellant acted under a bona fide belief that its activities were covered under the exemption notification and was in constant communication with the authorities, seeking clarifications. The penal provisions are meant to deter deliberate contravention of statutory provisions and are not intended to penalize bona fide taxpayers. Accordingly, the imposition of penalties and interest was held to be arbitrary, unjust, and unsustainable in law.
Download File

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Weekly Summary

VIL Video

GST changes in July '25
By Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?