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2015 (2) TMI 272 - CESTAT MUMBAICenvat Credit - whether Life insurance company can utilize input Credit available with them for payment of service tax against agency commission - whether the appellant can utilize CENVAT credit in excess of 20% of the service tax payable- Held that:- only change in the legal provision is the omission of Explanation under Rule 2(p). An Explanation only clarified the position. By omission of the explanation, the meaning does not undergo any change. Therefore, both prior to 19.4.2006 as also w.e.f. 19.4.2006, the meaning of the expression ‘output service', ‘provider of taxable service' and ‘person liable for paying service tax' remain the same. Since in the case of Insurance Auxiliary Service, the liability to pay Service Tax is on the service recipient in terms of Rule 2 (1)(d)(iii) of the Service Tax Rules, 1994, the appellants are the providers of the output service as defined in law. Therefore, the appellants are entitled to avail CENVAT Credit on the input services used for providing the output service. Consequently, there is no bar in utilization of CENVAT Credit for payment of Service Tax on Insurance Auxiliary Service by the appellants. There is no one to one correlation required between the input service and the output service under the CENVAT Credit Scheme and, therefore, the demands confirmed against the appellants for recovery of CENVAT Credit availed by them for discharging Service Tax liability on Insurance Auxiliary Service is clearly unsustainable - Following decision of assessee's own previous case [2014 (4) TMI 637 - CESTAT MUMBAI] - Insurance Auxiliary Service falls under sub-clause (zy), which is specified in sub-rule (5) of Rule 6. That being the position, the cap of 20% fixed under Rule 6(3)(c) would not apply to Insurance Auxiliary Service at all and the entire Service Tax Credit can be utilized for discharge of Service Tax. Decided in favour of assessee.
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