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2021 (1) TMI 1039 - AT - Service TaxCENVAT Credit - Reinsurance services obtained directly from the Indian reinsurers - Reinsurance service obtained under Indian Motor Third Party Insurance Pool - recovery of credit under Rule 14 of the CENVAT Credit Rules, 2004 read with proviso to Section 73(1) and Section 73(4) of the Finance Act, 1994 - interest under Section 75 of the Finance Act, 1994 - penalty imposed under rule 15(4) effective up to 26.02.2010 or 15(3) effective from 27.02.2010 of the CENVAT Credit Rules, 2004 read with section 78 of the Finance Act, 1994 - period subsequent April 01, 2011, when the definition of ‘input service’ was amended by adding an exclusion clause in rule 2(l) of the CENVAT Rules - HELD THAT:- A perusal of the exclusion clause shows that its scope is limited to those general insurance services, which relate to a motor vehicle. Use of the word ‘a’ assumes significance here, also considering the exception drawn in the exclusion clause. In the instant case, the reinsurance services availed by the Appellant are for insuring its business risks and not in respect of any particular motor vehicle. Reinsurance, by its nature, pertains to the insurance of business of the Appellant. Reinsurance services have never been availed by the Appellant in respect of a particular motor vehicle. In such a case, the above exclusion clause has no applicability to the present case and denial of CENVAT credit on basis of such a clause is not sustainable. Thus, even after the amendment of the definition of ‘input service’ in rule 2(l) of the CENVAT Rule w.e.f. April 01, 2011, the appellant would be eligible to avail CENVAT credit on both the aforesaid reinsurance services - It would, therefore, not be necessary to examine the contentions raised by the learned counsel for the appellant that by confirming the demand for the period w.e.f. April 01, 2011, the order has gone beyond the scope of the allegation made in the show cause notice or that extended period of limitation could not have been invoked in the facts and circumstances of the case. It is not possible to sustain that part of the order of the Commissioner that confirms the demand of CENVAT Credit of ₹ 196,46,97,360/- with interest and penalty - Appeal allowed.
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