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IN THE CESTAT, PRINCIPAL BENCH, NEW DELHI
Justice G. Raghuram, President and Shri Sahab Singh, Member (T)
PUBLIC HEALTH FOUNDATION OF INDIA
Versus
COMMR. OF SERVICE TAX, DELHI
Stay Order No. 59580/2013-CU(DB), dated 15-10-2013 in Application No. ST/Stay/4320/2012
in Appeal No. ST/3396/2012-CU(DB)
Stay/Dispensation of pre-deposit - Valuation (Service Tax) - Grants/Donations - Taxability - As
per C.B.E. & C. Circular No. 127/109/2010-S.T., dated 16-8-2010 grants/donations cannot be
subjected to tax - Prima facie no nexus between grants/donations from MSD Pharmaceuticals or
from Government Department and training provided to medical professionals in specialized
diabetes management - In the absence of such nexus, demand unsustainable - Strong case in
favour of appellant - Pre-deposit waived in full - Section 35F of Central Excise Act, 1944 as
applicable to Service Tax vide Section 83 of Finance Act, 1994. [paras 2, 4, 5]
Stay granted
DEPARTMENTAL CLARIFICATION CITED
C.B.E. & C. Circular No. 127/9/2010-S.T., dated 16-8-2010[Paras 2, 4]
REPRESENTED BY :
for the Appellant.
grants/donations and the taxable activity/service provided; and that such grants/donations
received cannot be subjected to tax.
3.Nowhere in the show cause notice dated 30-6-2012 or in the impugned adjudication order is
there any material available or considered, to establish that medical personnel who were
provided training in specialised diabetic care (Diabetes Management Practitcum) by the
petitioner had nexus with the grants/donations by M/s. MSD Pharmaceuticals Pvt. Ltd. or Govt.
Departments.
4.In the circumstances, we prima facie discern no nexus between the grants/donations to the
petitioner either from M/s. MSD Pharmaceuticals Pvt. Ltd. or from Govt. Departments and
medical professionals, who are provided the specialised diabetes management training who are
the recipients of the commercial training or coaching service, provided by the petitioner. In the
absence of such nexus, the inference in the adjudication order that the donations must be
included in the gross taxable value for taxable services provided by the petitioner, is prima facie
unsustainable, in view of the Board Circular dated 16-8-2010, referred to supra.
5.On the aforesaid premise, we see a strong prima facie case in favour of the petitioner and
grant waiver of pre-deposit in full and stay all further proceedings pursuant to the adjudication
order, pending disposal of the appeal. The application is disposed of accordingly.
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