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Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2021 (9) TMI AT This

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2021 (9) TMI 442 - AT - Service Tax


Issues:
Credit of service tax paid to the dealer disallowed due to alleged misdescription of services in the invoice.

Analysis:
The appellant, a General Insurance Company, entered into referral agreements with automobile dealers for offering insurance policies to customers at the time of sale of automobiles. The dealers referred insurance policies to customers and were compensated by the appellant based on a percentage of Own Damage (OD) premium collected. The dealers raised invoices describing the service as provision of space, computer, internet, and administrative support. The department disallowed the credit of service tax paid by the appellant to the dealers, claiming that the services described in the invoices were not actually provided. The Original Authority confirmed the demand, interest, and penalty, leading to the appellant's appeal before the Tribunal.

The appellant argued that the issue was already decided in their favor by the Tribunal in an earlier period. The department cited a previous decision by the Tribunal, following the judgment of the Hon'ble jurisdictional High Court in Modular Auto Ltd. vs. CCE, Chennai. The Tribunal noted that the department's contention was that the payout to dealers on OD premium was disguised as a service provided, and thus, the services mentioned in the invoices were not actually rendered. Relying on the earlier decision and the High Court judgment, the Tribunal held that the impugned order disallowing the credit could not be sustained and set it aside, allowing the appeal with consequential reliefs.

In conclusion, the Tribunal ruled in favor of the appellant, setting aside the demand disallowing the credit of service tax paid to the dealers. The decision was based on the analysis of the facts, previous rulings, and the interpretation of the services described in the invoices, ultimately leading to the allowance of the appeal with consequential reliefs.

 

 

 

 

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