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2023 (5) TMI 339 - AT - Service TaxDetermination of service tax liability - deposit insurance premium collected by the appellants DICGC - premium amount collected by DICGC has to be necessarily considered as inclusive of service tax element or not - period October, 2011 to March, 2012 and April, 2012 to September, 2012 - determination of interest payable by the appellants DICGC for the delay in payment of service tax on the due date - refunds sanctioned twice, not rectifying the mistake apparent on record. Levy of service tax on the deposit insurance activity undertaken by the appellant DICGC - HELD THAT:- On examination of the provisions of the DICGC Act, 1961, it was clarified by the CBIC vide letter No.354/164/2008-TRU dated 24.02.2009 that DICGC is not taxable under the taxable service of ‘general insurance business’; this view was reiterated by CBIC letter dated 22.04.2009. However, after the re-examination of all the relevant issues, the CBIC by letter dated 20.09.2011 clarified that the deposit insurance activity of DICGC falls within the ambit of section 65(105)(d) of the Finance Act, 1994 and is chargeable to Service Tax under “General Insurance Business” - the appellants DICGC are required to pay service tax on the taxable service of deposit insurance with effect from 20.09.2011. Whether the insurance premium should be considered as cum-tax-value? - HELD THAT:- The matter is no more res integra in view of the various decisions taken by this Tribunal, which were also upheld by the Apex Court. In particular, it is found that Kolkata Bench of CESTAT in the case of COMMR OF C. EX & CUS., PATNA VERSUS ADVANTAGE MEDIA CONSULTANT [2008 (3) TMI 59 - CESTAT KOLKATA] has held that Where the gross amount charged by a service provider, for the service provided or to be provided is inclusive of service tax payable, the value of such taxable service shall be such amount as with the addition of tax payable, is equal to the gross amount charged. The plea advanced by the department on the issue of cum-tax-value of premium collected for deposit insurance by the appellants DICGC, that such treatment of gross amount of premium collected by appellants DICGC as ‘inclusive of service tax’ will tantamount to reduction in premium amount which is solely decided by the Reserve Bank of India and the appellants DICGC does not have any unilateral authority to alter the rate of premium to be collected from the insured banks and they have to obtain the prior approval of the RBI, has been found to have been overcome by specific approval of the RBI as follows - appellants DICGC are eligible for the cum tax benefit. In view of this, we do not find any grounds for interfering with the conclusion arrived at in the impugned order passed by the Commissioner of Central Excise (Appeals), LTU, Mumbai that “premium amount collected has to be necessarily considered as inclusive of the service tax element”. Whether interest payable by the appellants for the delay in payment of service tax on the due date, require determination in terms of service tax legislation; and whether such amount of interest is required to be redetermined? - HELD THAT:- The facts of the case have been shown with respect to the ST-3 returns filed by the appellants DICGC and hence there exist reasonable ground for accepting the arguments advanced by the appellants DICGC. However, there are no other records such as invoice, receipts, online transactions summary, statement of accounts of the appellants DICGC for establishing the dates on which the payments were made by various banks towards deposit insurance premium that was collected by the appellants as gross amount of taxable services. In order to arrive at a conclusion on the correct date on which the service tax is due to be paid as per the provisions of Rule 6 of Service Tax Rules, 1994, with certainty upon confirmation of the facts, the matter should go back to the original Appellate Authority i.e., Commissioner of Central Excise (Appeals), LTU, Mumbai. Whether findings made by the Commissioner of Central Excise (Appeals), LTU, Mumbai in the impugned order, in respect of claims made by the appellants on appropriation of the refunds sanctioned twice, not rectifying the mistake apparent on record, require redetermination by the Commissioner of Central Excise (Appeals), LTU, Mumbai? - HELD THAT:- Considering the legal position in respect of Section 11 of the Central Excise Act, 1944 providing for recovery of sum due to the Government has not been made specifically applicable to service tax matters under Section 83 of the Finance Act, 1994 and the factual position that the show cause notice proceedings has not been concluded and thus there were no confirmed demands on the date of passing of the order by the concerned Assistant/Deputy Commissioner, even to consider under Section 87 of the Finance Act, 1994, the first appellate authority cannot be found fault - The appellants DICGC may be given liberty to raise any issues before the Commissioner of Central Excise (Appeals), LTU, Mumbai, when the matter is remanded for denovo adjudication. Further, while taking up the matter in denovo proceedings for redetermination of the interest payable for actual delay in payment of service tax, the appellants DICGC shall be given reasonable opportunity of being heard in person and for submission of the relevant documents in support of their claim - the matter needs to be sent back to the first appellate authority, to determine the actual amounts of refunds of service tax payable to the appellants DICGC. Appeal disposed off.
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