2026-VIL-198-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Cosmetic and plastic surgery and Healthcare services - Appellant operates a clinical establishment under the brand name 'Medlinks', providing dermatological and trichological healthcare services - Whether the services provided by the appellant fall under the category of 'cosmetic and plastic surgery services' and are thus liable to service tax, or whether they qualify as 'health care services' and are entitled to exemption – HELD – There is a fine line of distinction between an activity being covered as a cosmetic and plastic surgery or as a healthcare service. The services provided by the appellant include treatments for various skin and hair conditions, some of which may be undertaken for medical reasons, while others may be for aesthetic purposes. The definition of 'health care services' in the Mega Exemption Notification specifically excludes hair transplant or cosmetic or plastic surgery, except when undertaken to restore or reconstruct anatomy or functions of the body affected due to congenital defects, developmental abnormalities, injury or trauma – Matter is remanded to the adjudicating authority to examine the nature of each service rendered by the appellant and give reasoned findings on whether they qualify as healthcare services or cosmetic and plastic surgery services - The appeal is allowed by way of remand - Invocation of Extended Period of Limitation - The appellant argued that the demand under the show cause notice was time-barred, as it pertained to the period prior to the invocation of the extended period of limitation - Whether the extended period of limitation can be invoked in the present case – HELD - The issue is one of interpretation as to whether the services rendered by the appellant would fall under health care services and be entitled to exemption, or under cosmetic and plastic surgery services and be liable to service tax. Where the issue is one of interpretation, the element of suppression or misstatement cannot be attributed to the assessee, and therefore, the extended period of limitation cannot be invoked - Cum-Tax Benefit under Section 67(2) - The appellant argued that it is entitled to the cum-tax benefit under Section 67(2) of the Finance Act, 1994 - Whether the appellant is entitled to the cum-tax benefit – HELD - The service tax is an indirect tax, and as per the system of taxation, the tax borne by the consumer of services is collected by the assessee and remitted to the government. When the amount is collected for the provision of services, the total compensation received should be treated as inclusive of the service tax due to be paid by the ultimate customer, unless the service tax is also paid by the customer separately. The appellant is entitled to the cum-tax benefit under Section 67(2) of the Finance Act, 1994.
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