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2022 (10) TMI 59 - AT - Service TaxLevy of service tax - life insurance service - non-compete fees - exclusivity bonus - It is the contention of the tax authorities that non-compete fee and exclusivity bonus paid to agents from 2007 to 2011 was not consideration for such forbearance as the agents were not working exclusively for them and, hence, was commission, and liable to tax - reverse charge mechanism. HELD THAT:- The right of a disputant to carry decisions of the Tribunal to the next level in the appellate hierarchy embodied in the tax statute is not to be detracted from but the mere filing of an appeal does not alter the authority of the order so impugned unless it be stayed or until it be overruled. As an adjudicating authority, expected to be compliant with judicial discipline, the correct approach on his part cannot be faulted. Nor has Learned Authorized Representative been able to adduce any decision to the contrary. Demands under section 73(1) of Finance Act, 1994 - HELD THAT:- The recovery has been fastened on appellant-assessee on the premise that these are, in reality, ‘commission’ for executing sales of policy and, with subterfuge, transferred to provider of service to overcome the regulatory stipulations on payment to their agents. Effectively, it is averred that this is commission paid outside the pale of law but, notwithstanding the egregiousness, discharge of tax liability by the assessee in accordance with ‘reverse charge mechanism’ would suffice for tax authorities to turn a Nelson’s eye to this breach; in other words, compliance with the law of the land is not mandatory as long as the exchequer’s pound of flesh is parted with - The proper course of action available to tax authorities was to bring this alleged breach to the attention of the regulator but with that tax kitty may have been that much poorer. Levy of service tax - payments admittedly made to M/s ICICI Bank and M/s ICICI Securities towards display of publicity materials, enhancing customer awareness and obtaining customer feedback - period from July 2012 to March 2014 - HELD THAT:- It is on record that the assessee had produced evidence of tax payment by M/s ICICI Bank and M/s ICICI Securities for the various activities undertaken by them at their behest. The said invoices were not discarded but the tax discharge indicated therein were found to be incompatible for not having been discharged by the assessee - the attempt to foist levy afresh on the assessee-appellant does meet the test of law and must be set aside. The appeal of Revenue fails and the dropping of demand in the impugned order is upheld. The recoveries confirmed under section 73 of Finance Act, 1994 and demand on payments made to M/s India Infoline Insurance Services Ltd towards ‘rewards and recognition’ and towards ‘market support/administration’ support are set aside and the dispute remanded to enable the adjudicating authority to decide afresh after considering the submissions of the assessee-appellant - Appeal disposed off.
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