Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2019 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (2) TMI 868 - AT - Service TaxLevy of service tax - difference between the fund value and the surrender value in case of pre-mature surrender/discontinuance of ULIP - whether the exercise of the right of the insurer to receive money is merely a transaction in actionable claim, so as to be out of the purview of service tax? Held that:- The actionable claim as defined under Transfer of Property Act means a claim to any debt, secured by any beneficial interest in moveable property not in the possession, either actual or constructive, of the claimant. From the definition of actionable claim, the insurance policy or the surrender value thereof would become an actionable claim or otherwise was a matter of dispute in the Apex Court in the case of Union of India Vs. Sri Sarada Mills Ltd., [1972 (9) TMI 145 - SUPREME COURT] wherein, it has been explained that right to receive insurance money is an actionable claim. While, it is true that the expression of ‘Service’ under Section 65B(44) only w.e.f. 01.07.2012, however, even for the period prior thereto the transaction in question is a actionable claim and not a service. It has to be also noted that for the period prior to 01.07.2012, for an activity to be tax it had to qualify as a taxable service in one of the specified services - Since we are of the view, the transaction in question is not a service at all but the transaction in a actionable claim hence could not have been by any stretch of imagination covered under any of the specified taxable heads of service even for the period prior to 01.07.2012 - the demand of service tax on the surrender charges for the period in question is unsustainable. Demand of Interest on amount short paid - Held that:- The appellant assessee, having not debited the CENVAT register for the period June, 2012, needs to pay the interest on the said amount till the liability of ₹ 91,92,096/- has been paid i.e. to say for the period from July, 2012 to April, 2013 till the date on which debit entry was made in CENVAT register, interest liability on the ₹ 91,92,096/-, needs to be worked out as per the provisions of Section 75 of the Finance Act, 1994 and paid by the appellant assessee - penalty need not be imposed - decided against assessee. Service tax demand of ₹ 8,17,779/- - Held that:- The demand for the period needs to be upheld as appellant assessee is not able to show from the records that they had indicated the amount as other income in the service tax returns - demand with interest upheld - penalty set aside. Applicability of Rule 6 of the CENVAT Credit Rules - Held that:- Revenue has not challenged the findings of the Adjudicating Authority on merits qua the applicability of Rule 6, on this count itself, the appeal filed by the Revenue deserves to be dismissed. The mere fact that service tax was payable on the part of the value of the services subject to tax, that part of the value on which tax being levied cannot be said to be an exempt service. Only to draw an analogy, abatement was granted from the levy of service tax in excess of 33% on construction services in terms of Notification No. 01/2006-ST, the grant of said abatement did not result in the construction service being an exempt service - the amounts attributable towards surrender charges are not towards rendition of any service hence service tax liability does not arise. Appeal allowed in part.
|