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2019 (2) TMI 28 - CESTAT NEW DELHIReverse charge mechanism - Recipient of service - appellant has been receiving services under Business Auxiliary Services, Re-insurance Premium from foreign based service provider - short payment of service tax - Denial of CENVAT credit in respect of import of taxable services from outside India - Held that:- The Insurance Auxiliary Services & Business Auxiliary Services are taxable under sub-clause (zx) and (zzb) respectively of clause 105 of Section 65 of the Act are received by the appellant and that these services fall under the category 3rd to Section 66A, the appellant being the service recipient of those services and being based in India and is liable to pay the service tax. Once appellant is discharging the said liability he is entitled for the credit disallowing the same is therefore an error on the part o the adjudicating authority. Valuation - whether the value in balance sheet or the one in service tax return for the impugned period is to be taken for assessing liability? - Held that:- Section 67 of the Act acquires relevance which described valuation of the taxable service. In accordance thereof, such value has to be the gross amount charged, though this liability is fixed on the service provider but in the light of the provisions and in the given facts of the present case, it is apparent that service provider being outside India, it is recipient who is liable to discharge the service tax. From the record, it is observed that there has been difference in foreign exchange expenses reported in the balance sheet and the said expanses reported in the service tax returns. Since Section 67 of the Act, the taxable value shall be the gross amount charged by the service provider for providing such taxable services. It was not available to the appellant to make suo moto adjustments about the claims of the reinsurer, the scheme of availing credit itself is simultaneously in existence. Such suo moto adjustments shall forfeit the entire objective of credit availment scheme. Resultantly, the value assessed under this head need to be rechecked at the end of the authorities below - the difference in balance sheet and the ST-3 return figures, as far as the salary of employees is concerned has to be ignored with respect to the differences for rest of the values - It is for the adjudicating authorities to first verify and then to accordingly adjudicate. Appeal allowed by way of remand.
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