Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2020 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (10) TMI 578 - CESTAT MUMBAICENVAT Credit - exempt service or not - portion of payments (premium) received by the assessee that remains untaxed at the appropriate rate - subsequent failure in neutralizing the credit to the extent of not being attributable to taxable ‘output services’ - rule 6(3) of CENVAT Credit Rules, 2004 - HELD THAT:- The present dispute has its genesis in not subjecting the entirety of premium to tax from the time that service in relation to ‘life insurance’ was incorporated in section 65(105) of Finance Act, 1994 but was, by a series of amendments, expanded within the premium payable by the policy holder. Even after the last of the changes before that tax regime ended on 30th June 2012, the entirety of premium was not subject to tax as a certain portion therein could not be attributed to service. Even the two inclusions, effected in 2008 and 2010, could not be said to have incorporated a new service for taxation as the former depended on deeming of service for coverage by a new enumeration without going beyond the premium and the latter, too, not only did not travel beyond the premium but also remained within ‘life insurance’ as the activity under coverage. Hence, new identifiable ‘taxable services’ were not the subject of the impugned levy. Even if these were to considered as new ‘taxable services’ the question of harmonizing the proposition of Revenue with the scheme of tax arises. Finance Act, 1994 is concerned with ‘taxable service’ and not ‘service’ and it is only upon incorporation within section 65(105) that that a new ‘taxable service’ can be acknowledged. Rule 6 of CENVAT Credit Rules, 2004 is concerned with ‘exempted service’ to the extent that ‘input services’ are deployed for rendering such ‘exempted services’ and credit has been availed thereon. The legislative intent of the inclusive aspect of ‘exempted service’ did not contemplate subsequent incorporation as the test of exemption. Nevertheless, we must travel on to ascertain the legislative intent. There are certain activities that may well be beyond the competence of the Union to tax and, thereby, beyond contemplation for inclusion in section 65(105) of Finance Act, 1994. ‘Trading’ is one which comes to mind immediately and yet another is ‘works contract’ with a catena of decisions based on exclusion of competence to tax by the Union - In the absence of a definition of ‘service’, this is the interpretation that is doctrinally satisfying and but for which the inclusive component is otiose. Likewise, in a scheme of levy that enumerates the taxable activities, it is only by statutory incorporation that a service is acknowledgeable in law and any service that may be legislated within Finance Act, 1994 can be considered as ‘exempted’ only through notification under statutory authority. There is only one service and that is ‘risk cover’ with attendant payouts contingent upon death or maturity; subsequent taxation by creating a service within, and assigning a value to it, was not intended to cover a new service. Both were extractions from the expenditures incurred by the insurer in relation to the policy. The inclusive portion of the definition of ‘exempted service’ is restricted to certain services - Appeal allowed - decided in favor of appellant.
|