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2019 (12) TMI 121 - AT - Service TaxDemand of service tax - amount recovered by the appellants from their Insurance Agents as Service Tax for the period 2006-07 upto June, 2012 has not been deposited in the Government Exchequer - applicability of Section 73A (2) of Finance Act, 1994 - whether assessee can enter into a contract to shift the incidence of his service tax liability? - HELD THAT:- A careful reading of the said self contained provisions of Sec. 73A, and in particular Sub. Sec.(6), it can be safely inferred that the Government cannot retain the amount in excess of applicable service tax collected and deposited with the Govt., but after adjustment of the tax levied and payable in relation to the service either by the service provider or the service recipient, required to transfer the excess amount to the Consumer Welfare Fund or refund it to the person who borne the incidence of duty - What is the objective and purport of the said provision is that any amount in excess of the tax leviable is collected, the said amount should be deposited with the Govt. and the excess amount would be dealt with by the Govt. either being refunded to the person who bears the burden or being transferred to the consumer welfare Fund - The contractual obligation to reimburse the tax paid by the person designated to do so by law is, thus, not tax collected in any manner warranting recourse to Section 73A of Finance Act, 1994 - The demand under Section 73 A (2) confirmed qua the amount recovered from the agent as service tax is held not sustainable and as such is liable to be set aside. Demand of service tax - reimbursements paid to the insurance agents of expenses for trainings and overseas trainings - period of 2007-08 to 2012-13 - HELD THAT:- A combined reading of Section 67 of Finance Act and Clause (ix) of Rule 6(1) of the Valuation Rules makes it evident that only such value or commission or fee would form part of the gross amount, subject to Service Tax, which is in relation to the insurance auxiliary service provided by the insurance agent - it becomes clear that even the overseas expenditure in the nature of training and cost /expenses incurred by the appellant in relation to the same cannot be said to be for solicitation or procurement of insurance business, but exclusively for the mandatory training. Hence the such cost and expenses incurred by the appellant cannot be said to be treated as a consideration for service. The proposed demand for ₹ 12,17,50,892/- for the period from October 2007 to March, 2013 is therefore, not sustainable - demand set aside. Service Tax payable on 4% debit adjustment made by the appellant - HELD THAT:- Department could not produce any evidence to show that there was any amount which the insurance agents were suppose to pay back to the appellant and it is said amount which has been set out by the appellant against the commission paid to the insurance agent. In absence of any such evidence, the 4% debit adjustments from the commission as was paid to the insurance agent is nothing different than the discount as apparent from the agreed terms with such agents - The emphasis of adjudicating authority below upon rule 3 of Valuation Rules while confirming this demand is also opined erroneous, because Rule 3 (a) of Service Tax Rules is applicable only in the cases where the taxable value is not ascertainable. However, in the present case, the value is ascertainable - demand set aside. Extended period of limitation - HELD THAT:- The show cause notice in the present case has been issued on 22.04.2013, which is much beyond the permissible period of one year for the purpose, there is no suppression of facts. Department cannot invoke the extended period of limitation - The show cause notice is otherwise held to be barred by time. Appeal allowed - decided in favor of appellant.
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