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2022 (2) TMI 11 - HC - Service TaxCENVAT Credit - input service or not - re-insurance being pooled through a mechanism provided by IRDA - respondent who is an insurance company, had been depositing its service tax on the amount of insurance premium - HELD THAT:- In case of PNB Metlife [2015 (5) TMI 68 - KARNATAKA HIGH COURT] which judgment has been accepted by the department, the High Court has held that the service tax paid on re-insurance would be allowable as input service under the CENVAT Credit Rules, 2004 - In the present case, we are concerned with such re-insurance being pooled through a mechanism provided by IRDA. These directives had statutory force and the act of the insurance companies to create such a pool was not a voluntary act. The tribunal correctly therefore was of the opinion that this pooling system is nothing but a form of re-insurance. The term reinsurance has been defined under Section 2(16B) of the Insurance Act, 1938 as to mean the insurance of portion of one insurer’s risk by another insurer who accepts the risk for a mutually acceptable premium. Section 101A of the Act makes it compulsory for every insurer to re-insure such percentage of the sum insured on each policy as may be specified by the authority with a previous approval of the Central Government. Appeal dismissed.
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