M/s. Mohak Hi Tech Speciality Hospital @Hash Commissioner Of Central Excise, Customs And Service Tax, Indore

,,,,

These three service tax appeals can be decided by this common order, as the issue involved in all the appeals is whether bariatric surgery which the",,,,

appellant performs would be cosmetic surgery or plastic surgery so as to be taxable under section 65(105)(zzzzk) of the Finance Act, 1994, the",,,,

Finance Act .,,,,

The appellant is a part of Bhandari Hospital & Research Centre and claims to be engaged in performing bariatric surgery on patients suffering from,,,,

morbid obesity coupled with life-taking diseases like Type-II diabetes and hypertension. According to the appellant, bariatric surgery is a gastro",,,,

intestinal surgery carried out on the stomach in different manners like, by folding & stitching, by removing fat and cutting down, by insertion of outer",,,,

bodies or by bonding the stomach. The appellant also claims that bariatric surgery is performed on morbidly obese individuals suffering from,,,,

hypertension, Type-II diabetes, arthritis, lipid disorder or obstructed sleep apnea. The person selected for this surgery should also have a Body Mass",,,,

Index, BMI of above 32.5 with co-morbidities. The surgery is said to be performed as per the Asia Pacific International Federation of Surgical",,,,

Obesity Guidelines endorsed by Obesity Surgical Society of India. The appellant, therefore, claims that since bariatric surgery is performed to treat",,,,

obesity and other associated medical ailments, it will not be a cosmetic surgery or plastic surgery. It is for this reason that the appellant claims that it",,,,

did not pay service tax.,,,,

However, a show cause notice dated October 4, 2013 was issued to the appellant requiring the appellant to explain why it did not pay service tax on",,,,

the service provided through surgeries performed to cure obesity, which would be classifiable under cosmetic surgery or plastic surgery as defined in",,,,

section 65(105)(zzzzk) of the Finance Act. It was alleged that surgeries were performed with the sole motive of weight reduction and had no relation,,,,

with reconstruction or restoring anatomy or function of body affected due to congenital defects, development abnormalities, degenerative diseases,",,,,

injury or trauma. Thereafter, two periodical show cause notices dated September 11, 2014 and July 5, 2016 were also issued to the appellant proposing",,,,

demand of service tax with interest and penalty. The appellant filed detailed replies to the aforementioned show cause notices.,,,,

The Commissioner/Principal Commissioner, however, confirmed the demands proposed in the three show cause notices with interest and penalties",,,,

under section 65(105)(zzzzk) of the Finance Act. This section is reproduced below :,,,,

“Section 65 (105) (zzzzk): “taxable service†means any service provided or to be provided to any person, by any other person, in",,,,

relation to cosmetic surgery or plastic surgery, but does not include any surgery undertaken to restore or reconstruct anatomy or functions",,,,

of body affected due to congenital defects, development abnormalities, degenerative disease, injury or trauma;â€​",,,,

The Commissioner analyzed the provisions of section 65 (105)(zzzzk) of the Finance Act in the following manner:,,,,

“The definition leaves no doubt to understand that the said service is taxable when it is provided in relation to cosmetic or plastic surgery,,,,

exclusive of surgery performed to treat specified biological orders.,,,,

It is also a fact that the surgery is specifically and specially made to control obesity whether associated with any disease like arthritis,",,,,

hypertension, type-II diabetes etc. or otherwise and bariatric surgery is not carried out to treat any type of disease but to curb only obesity or",,,,

reduction of weight. It is also a fact that a person suffering from high obesity takes prior appointments with doctors. They are examined by,,,,

the doctor, records are maintained, numerous test are conducted and then only it is decided to carry out the surgery keeping in mind the pre",,,,

and post surgery complications. The fact cannot be denied that surgery is carried out not only by general surgeons but a bariatric surgeon,,,,

which is a fact accepted by the Director of the Noticee in this statement dt. 25/09/2013 wherein with response to a specific question, he had",,,,

categorically stated that “as a MS General surgeon and with special training in bariatric surgery and advance minimal access surgery I,,,,

am entitled to perform bariatric surgery. Also the surgical review corporation of USA has endorsed myself as a bariatric surgeon of,,,,

excellence and the centre as a centre of excellence in bariatric surgeryâ€. It is worthwhile to mention here that the statement is never,,,,

retracted by the directors of the Noticee firm. These facts further leaves no doubt that the surgery performed is neither for cure of type II,,,,

diabetes, hypertension, hypothyroidism, arthritis etc. as while carrying out the said surgery the specialized doctors treat diabetic patients,",,,,

hypertension patients or orthopaedicians doctors specialized to treat arthritis have no role to play. Not only this, the basic requirement to",,,,

carry out the surgery is BMI(Body Mass Index) and not the aforementioned diseases the person is afflicted with. The BMI is nothing but,,,,

only a scale to decide the degree of a person obesity. All these facts clearly establish that bariatric surgery is related to “weight,,,,

reductionâ€​ by making a surgery and not a treatment of degenerative disease like diabetes, cancer, heart disease, arthritis etc.â€​",,,,

(emphasis supplied),,,,

Thereafter, the Commissioner analyzed the meaning of the terms congenital defects, developmental abnormalities, degenerative diseases, injury or",,,,

trauma. This was for the reason that surgeries undertaken to restore or reconstruct anatomy or functions of body affected due to these are not taxable,,,,

under section 65(105)(zzzzk) of the Finance Act. The relevant observations are as follows :,,,,

“The Government while bringing the “Cosmetic or Plastic Surgery Services†under Service Tax net has taken utmost precautions and,,,,

therefore while defining the taxable service has kept taxation on surgery undertaken to restore or reconstruct anatomy or functions of body,,,,

affected due to congenital defects, developmental abnormalities, degenerative disease, injury or trauma out of purview of taxation. At this",,,,

juncture before getting on any further with the matter it is paramount to have a clear under standing of the terms Congenital Defects,",,,,

Developmental Abnormalities, Degenerative Diseases, Injury or Trauma.",,,,

The word congenital defect denotes a defect that is present by birth like absence eyelids, absence of pigmentation in eyes, hair or skin, sex",,,,

organs having both male and female characteristics. Similarly, the word degenerative disease defines the disease in which the function or",,,,

structure of affected tissue or organ progressively deteriorate over time. The best examples are cancer, Parkinson disease, diabetes,",,,,

arthritis etc. The word “injury†means damage caused to body by an outside force like bruise, wounds, joint dislocation, fractures,",,,,

burns, etc. The word “trauma†is defined as a body wound or shock due to accident or sudden physical injury mostly treated in",,,,

specialized care centers termed as “trauma centersâ€. From these definition it is also clear that it will be far fetched to ascribe any,,,,

connection to Bariatric Surgery has got to Developmental abnormalities, injury or trauma and thus the bariatric surgery cannot be included",,,,

in any surgery undertaken to restore or reconstruct anatomy or functions of body affected due to “developmental abnormalities†the,,,,

Noticee has forwarded the argument that obesity as a medical condition is a result of “Developmental abnormality†and hence to be,,,,

kept outside the scope of “Cosmetic and Plastic Surgery Services.â€​,,,,

(emphasis supplied),,,,

The Commissioner then analyzed the contents of the changes and clarification on service tax issued by the Government of India on the 2009-10,,,,

Appeal Nos.,ST/54884/2014,ST/51333/2016,ST/53111/2016,

Date of Orders,22.07.2014,26.02.2016,27.09.2016,

Date of Show Cause

Notices",04.10.2013,11.09.2014,05.07.2016,

Period of Dispute,"01.11.2011 to

07.03.2013","08.03.2013 to

31.03.2014","01.04.2014 to

31.03.2015",

Duty Demanded,"Rs. 81,92,416/-","Rs. 1,35,67,694/-","Rs. 1,53,35,526/-",

Penalty imposed under

the Finance Act","Section 77 - Rs. 10,000/-

Section 78 - Rs.

40,96,208/-","Section 76 â€" Rs.

13,56,796/-

Section 78 â€" Rs.

10,000/-

Section 70 - late fee of

Rs. 20,000/-","Section 76 â€" Rs.

15,33,552/-

Section 78 â€" Rs.

10,000/-

Section 70 - late fee of

Rs. 20,000/-",

(v) The intention of the law makers is clearly to tax only the peripheral healthcare services, while keeping the core healthcare services out of service",,,,

tax net. This legal position is applicable for the period prior to and from July 1, 2012.",,,,

Shri Vivek Pandey, learned Authorized Representative appearing for the Department, however, supported the impugned orders and made the",,,,

following submissions:,,,,

(i) In view of the definition of plastic surgery and cosmetic surgery, it can safely be said that all types of bariatric surgeries are plastic and cosmetic in",,,,

nature;,,,,

 (ii) The activity undertaken by the appellant does not fall in the exclusion clause of surgeries contemplated under section 65(105)(zzzzk) of the,,,,

Finance Act;,,,,

(iii) The appellant is not justified in contending that the activity was undertaken to restore ""developmental abnormalities""; and",,,,

(iv) The discharge summary of five obese patients undergoing bariatric surgery does not indicate any condition caused by congenital defects,",,,,

developmental abnormalities, degenerated diseases, injury or trauma.",,,,

The submissions advanced by learned counsel for the appellant and the learned Authorized Representative of the Department have been,,,,

considered.,,,,

The appellant claims that it performs bariatric surgery on patients suffering from morbid obesity. Morbid has been defined in Oxford English,,,,

Reference Dictionary (Indian Edition) as ""of the nature of or indicative of disease"". It has been defined in Webster’s Third New International",,,,

Dictionary as ""relating to, or characteristic or disease."" Obesity has been defined in the Webster’s Third New International Dictionary to mean ""a",,,,

bodily condition marked by excessive generalized deposition and storage of fatâ€. Thus, morbid obesity would be a disease relating to a bodily",,,,

condition marked by generalized deposition and storage of fat.,,,,

The period in the show cause notices is from November, 2011 upto March, 2015. Thus, the period before and after July 1, 2012 is covered by the",,,,

three show cause notices.,,,,

For the period from November 1, 2011 upto June 30, 2012, the Commissioner has confirmed the demand of service tax by classifying the activities",,,,

of the appellant under section 65 (105)(zzzzk) of the Finance Act. For the period subsequent to June 30, 2012, the show cause notices relies on the",,,,

same provision. The appellant, however, claims that it does not perform any cosmetic or plastic surgery and that it is exempted from service tax for",,,,

the period commencing July 1, 2012 in terms of serial number 2 of the Notification No. 25/2012-ST dated June 20, 2012 (Exemption Notification) as",,,,

the activity falls under ""health care services by a clinical establishment""",,,,

It is, therefore, appropriate to reproduce the relevant portion of the Exemption Notification dated June 20, 2012, and it is as follows.",,,,

In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the",,,,

said Act) and in supersession of notification number 12/2012-Service Tax, dated the 17the March, 2012, published in the Gazette of India,",,,,

Extraordinary, Part II, Section 3, Subsection(i) vide number G.S.R. 210(E), dated the 17th March, 2012, the Central Government, being",,,,

satisfied that it is necessary in the public interest so to do, hereby exempts the following taxable services from the whole of the service tax",,,,

leviable thereon under section 66B of the said Act, namely:-",,,,

******,,,,

Health care services by a clinical establishment, an authorized medical practitioner or paramedics;",,,,

******,,,,

Paragraph 2(t) of the said Notification defines “health care servicesâ€​ as follows:,,,,

(t) “health care services†means any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or",,,,

pregnancy in any recognized system of medicines in India and includes services by way of transportation of the patient to and from a,,,,

clinical establishment, but does not include hair transplant or cosmetic or plastic surgery, except when undertaken to restore or to",,,,

reconstruct anatomy or functions of body affected due to congenital defects, developmental abnormalities, injury or trauma.",,,,

The reasons given by the Commissioner for confirming the demand of service tax are briefly summarized as under:,,,,

(i) Bariatric surgery is carried out to control obesity, whether associated with any disease like arthritis, hypertension, Type-II diabetes or not, and is not",,,,

carried out to treat any type of disease.,,,,

(ii) Bariatric surgery is carried out by surgeons specializing in bariatric surgery only and not by surgeons specializing in cure of Type-II diabetes,",,,,

hypertension or arthritis. The basic requirement to carry out the surgery is BMI and not the aforementioned diseases.,,,,

(iii) As per the brochures published by Ethicon Endosurgery, Johnson & Johnson Medical, it is clear that bariatric surgery is singularly for weight loss,",,,,

irrespective of its association with any disease.,,,,

(iv) Obesity cannot be termed as developmental abnormalities, as developmental abnormalities are manifest at the natal stage of human being.",,,,

(v) Liposuction has been termed as cosmetic surgery from July 6, 2009. Thus, bariatric surgery comes under the purview of cosmetic surgery.",,,,

(vi) Reliance placed by the appellant on Central Government Health Scheme is misplaced as it is under a different statute.,,,,

A bare perusal of section 65(105)(zzzzk) of the Finance Act indicates that it is divided into two parts, namely, the ‘means part’ and the",,,,

‘exclusion part’. Under the ‘means part’, taxable service would mean any service provided or to be provided to any person, by any other",,,,

person, in relation to cosmetic surgery or plastic surgery. The ‘exclusion part’ excludes any surgery undertaken to restore or reconstruct",,,,

anatomy or functions of body affected due to congenital defects, developmental abnormality, degenerative disease, injury or trauma.",,,,

S. No.,"Relevant

Resource","Definition of

Bariatrics","Definition of Plastic

Surgery","Definition of

Cosmetic

Surgery

1.,"Dorland’s

Medical Dictionary","A field of medicine

encompassing the

study of

overweight, its

cause, prevention,

and treatment","Surgery concerned with

the restoration,

reconstruction,

correction, or

improvement in the

shape and appearance

of body structures that

are defective, damaged,

or misshapen by injury,

disease, or growth and

development.","That department

of plastic surgery

which deals with

procedures

designed to

improve the

patient’s

appearance by

plastics

restoration,

correction,

removal of

blemishes etc

2.,"Encyclopaedia and

Dictionary of

Medicine","A field of medicine

encompassing the

study of

overweight, its

cause, prevention,

and treatment.","Surgery concerned with

the restoration,

reconstruction,

correction, or

improvement in the

shape and appearance

of body structure that

are defective, damaged,

or misshapened by

injury, disease, or

anomalous growth and

development",

3.,"Butterworth’s

Dictionary (1978)",,"That branch of surgery

which deals with the

reconstruction, or with

the correction, of

deformities of soft

tissues","That branch of

plastics surgery

which deals mainly

with attempt to

improve the

appearance

especially of face,

hands and breast.

taxed is cosmetic surgery and plastic surgery undertaken to preserve or enhance physical appearance or beauty. As per common definition,",,,,

surgery is a medical technology consisting of a physical intervention on tissues. As a general rule, a procedure is considered surgical when",,,,

it involves cutting of a patient’s tissues or closure of a previously sustained wound. Commonly surgery is performed in a sterile,,,,

environment with anesthesia and antiseptic conditions using surgical instruments. It also includes ‘non-invasive’ surgery.,,,,

2.4.2. Some of the commonly known aesthetic/cosmetic surgeries are abdominoplasty (tummy tuck); blepharoplasty (eyelid surgery);,,,,

mammoplasty, buttock augmentation and lift; rhinoplasty (reshaping of nose); otoplasty (ear surgery); Rhytidectomy (fact lift); liposuction",,,,

(removal of fat from body); brow lift; cheek augmentation; facial implants; lip augmentation; forehead lift; cosmetic dental surgery;,,,,

orthodontics; aesthetic dentistry; laser skin surfacing etc.,,,,

2.4.3. However, any reconstructive surgery undertaken to restore one’s appearance, anatomy or bodily functions affected due to",,,,

congenital defects, developmental abnormalities, degenerative disease, injury or trauma would be outside the scope of this service. These",,,,

processes could be undertaken to correct impairment caused by burns, fractures or congenital abnormalities like cleft lip etc.",,,,

(emphasis supplied),,,,

A bare perusal of the aforesaid Circular shows that the services proposed to be taxed in the 2009-10 budget are cosmetic surgery and plastic,,,,

surgery undertaken to preserve or enhance physical appearance or beauty. Out of the commonly known cosmetic surgery, reference has also been",,,,

made to liposuction. The Circular also specifically mentions that any reconstructive surgery undertaken to restore one’s appearance, anatomy or",,,,

bodily functions affected due to congenital defects, developmental abnormalities, degenerative disease, injury or trauma would be outside the scope of",,,,

this service.,,,,

It will also be pertinent to refer to the minutes of the meeting of the Postgraduate Medical Education Committee held on July 25, 2014 in regard to",,,,

the guidance issued for the nature of laparoscopic bariatric surgery. The Medical Council approved that bariatric surgery is a gastrointestinal non,,,,

cosmetic surgery under the rubric of surgical gastroenterology and is not plastic surgery. The minutes are reproduced below:,,,,

MEDICAL COUNCIL OF INDIA POSTGRADUATE MEDICAL EDUCATION COMMITTEE,,,,

Minutes of the Postgraduate Medical Education Committee held on 25th July, 2014 at 10.30 AM. in the Council Office, SectorVIII, Pocket-",,,,

14, Dwarka, New Delhi.",,,,

Guidance with request to the nature of Laparoscopic Bariatric Surgery.,,,,

Read: the letter dt. 28.01.2014 from Dr. S.D. Joshi Dean, Sri Aurobindo Medical College & PG Institute SAIMS Hospital with regard to the",,,,

nature of Laparoscopic Bariatric Surgery.,,,,

The Postgraduate Committee considered the letter dt. 28.01.2014 from Dr. S.D. Joshi Dean, Sri Aurobindo Medical College & Pg Institute",,,,

SAIMS Hospital alongwith recommendations of the Chairman, Academic Cell/Sub-Committee with regard to the nature of Laparoscopic",,,,

Bariatric Surgery and decided to approve the following:-,,,,

“….Bariatric Surgery is a Gastrointestinal non Cosmetic Surgery under the rubric of surgical gastroenterology and not plastic,,,,

surgeryâ€​.,,,,

At this stage it will also be pertinent to refer to the letter dated May 6, 2014 sent by the President of the Indian Medical Association wherein, after",,,,

making reference to the resolution of the American Medical Associations, he has stated that the cosmetic surgery is done to improve the looks of a",,,,

person, but bariatric surgery is done to correct the metabolic and hormonal state of the diseased body along with weight loss. The letter is reproduced",,,,

below:,,,,

INDIAN MEDICAL ASSOCIATION INDORE BRANCH-2013-14,,,,

Dear Dr. Bhandari,",,,,

With Reference to you letter DT. 05-05-2014, we would like to state that as per",,,,

World health organization International Code of Diseases 10 version 2010 (ICD 10) IV -Endocrine, Nutritional & metabolic diseases",,,,

Obesity is included At “E66-Obesity & E66.8- Morbid Obesity"".",,,,

The American Medical Association has also passed the resolution pushed by American Association of Clinical Endocrinologists, the",,,,

American College of Cardiology & others. The resolution argued that Obesity was a “multimetabolic & hormonal disease state†that,,,,

leads to unfavorable outcomes like Type 2 Diabetes and Cardiovascular diseases.,,,,

“The Suggestion that Obesity is not a diseases but rather a consequence of a Chosen lifestyle exemplified by overeating and / or,,,,

inactivity is equivalent to suggesting that Lung Cancer is not a disease because it was brought about by individual choice to smoke,,,,

cigarettesâ€​, the resolution said.",,,,

The cosmetic surgery is done to improve the looks of a person, but bariatric surgery is done to correct the metabolic and hormonal state of",,,,

the diseased body along with weight loss.,,,,

May 6,2014",,,,

President-IMA, Indore, Br.",,,,

Dr. Surendra Bapat,,,,

M.B.M.S. FAIS, FIAGES, MAMASI, MACRSI MBA (HA), LLB (HONOURS), MA (SOCIOLOGY) B.J.D.Y.E.",,,,

(emphasis supplied),,,,

It is evident from the aforesaid that bariatric surgery is distinct from the plastic or cosmetic surgery. Bariatric surgery is a procedure through,,,,

which the intake capacity of the patient is restricted, thereby resulting in weight loss which is necessary for control of obesity related diseases, while",,,,

plastic or cosmetic surgery is intended to improve the outer shape and appearance of the body. Bariatric surgery is undertaken only on those patients,,,,

who are diagnosed with morbid obesity, which itself is a disease, with other co-morbidities and on such patients who have a BMI of over 32.5. The",,,,

Central Board of Excise and Customs has also clarified that the service proposed to be taxed were cosmetic surgery and plastic surgery undertaken to,,,,

preserve or enhance physical appearance or beauty. Liposuction has been mentioned to a commonly known cosmetic surgery. Liposuction, however,",,,,

is not bariatric surgery. The aim of liposuction is only to remove the excess fat of the body from specific target areas through suctioning so as to,,,,

improve the shape and contour of the body, but the aim and object of bariatric surgery is to cure the state of morbid obesity and related disease. The",,,,

Medical Council of India, in its meeting held on July 25, 2014, also noted that bariatric surgery is not cosmetic or plastic surgery. The President of the",,,,

Indian Medical Association in a letter dated May 6, 2014 also wrote that cosmetic surgery is done to improve the looks of a person, but bariatric",,,,

surgery is done to correct the metabolic and hormonal state of the diseased body along with weight loss.,,,,

Learned Authorized Representative of the Department has, however, placed emphasis on the discharge summary of five obese patients",,,,

undergoing bariatric surgery to contend that it does reflect any condition caused by congenital defects, developmental abnormalities, degenerated",,,,

diseases, injury or trauma.",,,,

The discharge summary of the patients has been enclosed Annexure-5 to the appeal memo. The ‘diagnosis’ and the ‘summary of the,,,,

case’ in all the ‘discharge summary’ mentions morbid obesity with one or more life-taking disease of the nature referred to by the appellant.,,,,

It is, therefore, not possible to conclude from the ‘discharge summary’ that the patients undergoing bariatric surgery did not suffer from morbid",,,,

obesity coupled with such diseases.,,,,

It is also not possible, for the reasons stated above, to accept the submission of learned Authorized Representative for the Department that all",,,,

types of bariatric surgeries are plastic or cosmetic surgery.,,,,

It is also not necessary to examine the contention of the learned Authorized Representative of the Department that the activity undertaken by the,,,,

appellant does not fall in the exclusion clause of surgeries contemplated under section 65(105)(zzzzk) of the Finance Act, since the appellant is not",,,,

performing plastic surgery or cosmetic surgery and, therefore, the surgery would not fall in the ‘main part’ of the definition of taxable service",,,,

under section 65(105)(zzzzk) of the Finance Act.,,,,

The factual position pointed out by the appellant has also been noted with approval by the Additional Commissioner in an order dated February 22,",,,,

2016 by which the proceedings initiated by the show cause notice dated August 11, 2015 issued to M/s. Asian Bariatrics, Rajkot were dropped. The",,,,

show cause notice proposed to tax the bariatric surgery performed by M/s. Asian Bariatric under section 65 (105)(zzzzk) of the Finance Act. The,,,,

Additional Commissioner noticed that the issue that was required to be decided was whether bariatric surgery was taxable under the aforesaid section,,,,

of the Finance Act. After referring to the Circular dated July 6, 2009, the Exemption Notification dated June 30, 2012, the literature provided by the",,,,

appellant therein relating to bariatrics, the letter of the Medical Council of India, the Additional Commissioner found as a fact that bariatric surgery",,,,

cannot be considered as cosmetic or plastic surgery and was, therefore, not taxable under section 65(105)(zzzzk) of the Finance Act. The relevant",,,,

portion of the order passed by the Additional Commissioner is reproduced below:,,,,

“4.2 I find that the limited issue to be decided in the present case is whether the Bariatric Surgery performed by them is liable to be,,,,

considered as taxable service under the category of “Cosmetic or Plastic Surgery†classifiable under Section 65(105)(zzzzk) and,,,,

whether the Noticee is liable to pay Service Tax on the same, along with interest as applicable and consequent imposition of penalties under",,,,

various provisions of Finance Act, 1994, as proposed in the present show cause notice.",,,,

4.5 On careful reading of the definition of Cosmetic Surgery and the clarification given by the Board, mentioned hereinabove, I find that",,,,

that reconstructive surgeries undertaken to restore one’s appearance, anatomy or bodily functions affected due to congenital defects",,,,

developmental abnormalities, degenerative diseases, injuries or trauma would be outside the scope of cosmetic and plastic surgery as these",,,,

processes could be undertaken to correct impairment caused by burns fractures or congenital abnormalities.,,,,

4.6 I find that the Noticee in their written submissions has explained in detail the necessity of Bariatric Surgery performed on the patients,,,,

and the difference between Bariatric Surgery and a Cosmetic Surgery, where in they have stated that Bariatric Surgery is a Gastrointestinal",,,,

Surgery (G.I.) which leads to hormonal changes in the patient; that the key difference between a cosmetic surgery and bariatric surgery is,,,,

that a cosmetic surgery leads to immediate impact on the person, as physical appearance changes immediately whereas in the case of",,,,

Bariatric Surgery the impact appeared after long period of 12 to 18 months that the Bariatric Surgery in a complex surgery leading to slow,,,,

but proven improvement of the overall functioning of human body and it is better known as metabolic surgery; that it is performed with,,,,

intent to resolution of any metabolic syndrome which is the combination of obesity and type 2 diabetes mellitus and/or hypertension and/or,,,,

dyslipidaemia; it is performed to reduce persons desire to eat and it cannot be compared with the Cosmetic or Plastic Surgery; that Bariatric,,,,

Surgery is covered under ‘health care services’ provided by a clinical establishment an authorized medical practitioner or,,,,

paramedics and hence the same are exempted under Notification No. 25/2012-ST dated 30-06-2012. I find that the definition of ‘health,,,,

care service’, as prescribed under para 2(t) of the Notification No. 25/2012-ST dated 30-06-2012 reads as under:",,,,

“health care services†means any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or",,,,

pregnancy in any recognized system of medicines in India and includes services by way of transportation of the patient to and from a,,,,

clinical establishment, but does not include hair transplant or cosmetic or plastic surgery, except when undertaken to restore or to",,,,

reconstruct anatomy or functions of body affected due to congenital defects, developmental abnormalities, injury or trauma;â€​",,,,

4.7 I find that the Noticee in support of their above explanation of Bariatric Surgery submitted various nationally and internationally,,,,

acclaimed study reports and research materials. On perusal of these reports and research materials, I find in “guidelines for Bariatrics",,,,

(Metabolic) Surgery for Indian Population†(Section 25 Surgery, Chapter 172, published by P. Praveen Raj, C Palanivelu, Author for",,,,

Medical Books) indicate Bariatric Surgery referred to as metabolic surgery and is performed on the stomach and/or intestines with the,,,,

intent of resolution of metabolic syndrome [obesity, Type 2 diabetes mellitus (DM), hypertension, dyslipidemia]. On perusal of copy of",,,,

“The New England Journal of Medicineâ€, published in December 23, 2004, Vol.351 No. 26, page 2683, I find that the Article under",,,,

heading “Lifestyle, Diabetes, and Cardiovascular Risk Factors 10 years after Bariatric Surgery†concluded “As compared with",,,,

conventional therapy, bariatric surgery appeared to be a viable option for treatment of severe obesity, resulting in long term weight loss,",,,,

improved lifestyle, and, except for hyperchoterolemia, amelioration in risk factors that were elevated at baseline.†Further, on perusal of",,,,

copy of ‘fact sheet’ published by the American Society for Metabolic & Bariatric Surgery (ASMBS), I find that the Medical and",,,,

Government groups supported Bariatric Surgery which resulted in long term weight loss and significant reductions in cardiac and other,,,,

risk factors for some severely obese adults. I further find that the Medical Council of India, which is a regulating/controlling authority for",,,,

medical, profession in India, vide their letter No. MCI23(1)/2014/Med./26765 dated 02-8-2014, addressed to the Dean, Sri Aurobindo",,,,

Medical College & PG Institute, Indore has clarified that “Bariatric Surgery is a Gastrointestinal non Cosmetic Surgery under the rubric",,,,

of surgical gastroenterology and not plastic surgery.â€​,,,,

4.8 Thus, from the explanation given by the Noticee in their written submission regarding Bariatric Surgery and perusal of the above",,,,

mentioned documentary evidence submitted by the Noticee along with the clarification issued by the CBEC vide letter dated 06-09-2009, I",,,,

am of a considered view that Bariatric Surgery cannot be considered as a Cosmetic or Plastic Surgery, and hence the same is not a taxable",,,,

service within the meaning of clause (105) (zzzzk) of Section 65 of the Finance Act, 1994 and consequently the Noticee is not liable to pay",,,,

Service Tax on the said service.,,,,

4.9 I find that since Bariatric Surgery is not a Cosmetic or Plastic Surgery it does not fall under Section 65(105)(zzzzk) ibid and therefore, it",,,,

is not a taxable service. I find that the Noticee, vide their letter dated 21-05- 2015, addressed to the Range Superintendent of Service Tax,",,,,

Rajkot and also vide letter dated 12-02-2016, have provided details of the surgeries performed by them, which include date of surgery,",,,,

name of the patient type of surgery and amount received by them. On scrutiny of this information I find that the Noticee has performed,,,,

Bariatric Surgery during the period from March-2014 to March-2015. Since the Noticee has performed Bariatric Surgery and since,,,,

Bariatric Surgery does not cover under the definition of Cosmetic or Plastic Surgery, as defined under Section 65(105)(zzzzk), as discussed",,,,

in length in preceding paras, I hold that the Noticee is not liable to pay Service Tax amounting to Rs.21,72,888/- demanded from them vide",,,,

Show Cause Notice No. V.ST/AR-1-RJT/43/ADC(BKS)/2015 dated 11-08-2015, in respect of Bariatric Surgeries performed during the",,,,

period from March 2014 to March 2015, as the same is not a taxable service, as the same is not legally sustainable and therefore, liable to",,,,

be dropped and consequently the proposal for recovery of interest and imposition of penalties on the Noticee.â€​,,,,

(emphasis supplied),,,,

The aforesaid order of the Additional Commissioner was accepted by the Department, which fact is clear from the information supplied under the",,,,

Right to Information Act. The information is reproduced below:,,,,

“The required information as sought for by the applicant is as under;,,,,

The Order-in-Original No. 33/ADC/PV/2015-16 dated 22.02.2016 in the case of M/s. Asian Bariatrics, Rajkot passed by the Additional",,,,

Commissioner, Central Excise & Service Tax, Rajkot has been accepted by the Principal Commissioner on 04.05.2016.â€​",,,,

Thus, when the Department itself accepted the findings of the Additional Commissioner in the aforesaid order dated February 22, 2016 that",,,,

bariatric surgery is not cosmetic surgery or plastic surgery, it is not open to the Department to now contend that bariatric surgery is cosmetic surgery",,,,

or plastic surgery. The confirmation of demand in the impugned order for this reason cannot be sustained.,,,,

In coming to this conclusion, reliance can be placed on the decision of the Tribunal in Shri Niraj Prasad vs. Commissioner of Central Excise and",,,,

Service Tax, Kanpur, 2019- TIOL-3237-CESTAT-ALL . A similar issue had arisen for consideration. In one matter, the demand of service tax under",,,,

“business auxiliary service†by a similarly situated assessee had been set aside by the Commissioner and that order had attained finality. The,,,,

Division Bench of the Tribunal held that when the Department had permitted that order to attain finality, it cannot be permitted to urge in the case of",,,,

the appellant that the appellant should pay service tax under “business auxiliary serviceâ€, In coming to this conclusion, reliance was placed by the",,,,

Division Bench on the decision of the Supreme Court in Damodar J. Malpani vs. Collector of Central Excise, 2002(146) E.L.T 483 (S.C.).",,,,

The inevitable conclusion, therefore, that follows from the aforesaid discussion is that bariatric surgery performed by the appellant on patients",,,,

suffering from morbid obesity coupled with life-taking diseases like Type-II diabetes and Hypertension, arthritis, lipid disorder or obstructed sleep",,,,

apnea or disease of a like nature, cannot not be subjected to service tax under section 65(105)(zzzzk) of the Finance Act.",,,,

Thus, for all the reasons stated above, the impugned orders dated July 22, 2014, February 26, 2016 and September 27, 2016 are set aside and",,,,

Service Tax Appeal No. 54884 of 2014, Service Tax Appeal No. 51333 of 2016 and Service Tax Appeal No. 53111 of 2016 are allowed.",,,,

(Order pronounced in the open Court on November 3, 2020.)",,,,