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2020 (8) TMI 786 - AT - Service TaxCENVAT Credit - input services or not - input services, value of which not included in value of output services - insurance service - negative list regime - ‘endowment’ and ‘unit linked investment plan’ policies - circular no. 334/1/2008-TRU dated 29th February 2008 - HELD THAT:- This issue came up before, and was decided by, the Tribunal in SBI LIFE INSURANCE COMPANY LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, MUMBAI – II [2019 (12) TMI 1127 - CESTAT MUMBAI]. In this decision, it has been held that the main part of the definition of ‘exempted service’ in rule 2( e) of CENVAT Credit Rules, 2004 clearly refers only to such taxable service as are exempt from the whole of the tax and, being fenced in by the definition of taxable services enumerated, for the disputed period, within section 65(105) of Finance Act, 1994, is not amenable to coverage of any service that is yet to be taxable. In consequence, it has been held that the inclusive component, pertaining, as they are, to ‘services’ which is without definition, can only be intended for such activities as cannot be taxed by recourse to List I of the Seventh Schedule in the Constitution of India. That was considered to be the only harmonious construct of the definition taken in totality. As the receipts excluded from computation of assessable value are not consideration for exempt services or may even lie outside the scope of inclusion as consideration, by being returnable to the policy holder, the disputed ‘input services’ does not come within the ambit of rule 6 of CENVAT Credit Rules, 2004. Appeal allowed.
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