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2023 (7) TMI 826 - AT - Service TaxRejection of refund claim - amount paid under protest - tax has been included in the gross amount collected as insurance premium or not - HELD THAT:- It is unable to comprehend the finding of the original authority that the claim for refund was premature. It was preferred after payment of the claimed amount and it was certainly later than the final audit objection came to approved by the appropriate internal authority. Not unnaturally, the reviewing authority has not placed much store on that line. The thrust of the grounds is that the respondent has not evinced any factual material to contend that the amount collected did include the taxes; on the contrary, it was pointed out that, prior to the decision of the Tribunal in 2015 upholding the leviability of tax on activity undertaken by the respondent from 2011 onwards, the assessee had not been functioning under the premise that tax was not leviable and, hence, the claim that such is included in the premium is not tenable. The history of the dispute itself offers reliable guide to the view to be taken. The respondent had been providing the impugned service since 1st January 1962 by mandate of Parliament after failure of banks left small depositors stranded and though service tax was introduced as far back as 1994 on ‘insurance service’, the nature of its activity left it undisturbed from tax oversight until the issue determined by the Tribunal in re Deposit Insurance and Credit Guarantee Insurance Corporation fastened the tax liability on them in 2015 and, in accordance with circular of Central Board of Excise & Customs (CBEC) - in the absence of exemption, tax liability does lie and, in such circumstances, the tax would have to be borne from the premium itself. Furthermore, as set out in the grounds of appeal, they could not have collected any amount higher than the premium specified by the Reserve Bank of India (RBI) as their customers – the banks also bound under the supervision of the Reserve Bank of India – would not pay up any amount over and above the premium. Consequently, the consideration, and gross value, includes the tax amount and liability was to be computed only on the ‘cum tax’ value. The computation of premium is a complicated exercise involving several aspects and factors as well estimation of probability; it is, therefore, not possible to conclusively conclude that inclusion of tax liability would have altered the premium payable for the service. A normal commercial transaction cannot be equated with insurance service and the extent to which the premium represents consideration for insurance cover. No evidence has been placed on record by the appellant to demonstrate otherwise. There are no merit in the appeal which is dismissed.
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