9911796707
TMI Blog2014 (2) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... cument by the insured, the insured should be given the right of refusing the policy. The appellants claim that in cases of such refusal, the appellants refund the insurance premiums along with the service tax collected to the persons from whom such amounts are collected. Since such cancelled policies involve payment of service tax for services not provided the appellants adjust the excess payment made during one month for such cancelled policies, for paying service tax liability in subsequent months as per Rule 6 (3) of Service Tax Rules, 1994. The core dispute in this proceeding is whether such adjustments made during the period 01-10-2007 to 31-01-2011 (with certain breaks covered by another SCN) were in conformity with the said Rule. The said rule reads as under:- (3) Where an assessee has paid to the credit of Central Government service tax in respect of a taxable service, which is not so provided by him either wholly or partially for any reason, the assessee may adjust the excess service tax so paid by him (calculated on a pro rata basis) against his service tax liability for the subsequent period, if the assessee has refunded the value of taxable service and the service tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions are involved and the industry practice is to make refunds by way of book adjustment allowing credit as stated by the Ld. Advocate (which is subject to verification). Hence, the department cannot insist that in every case the refund may be made in particular manner i.e., by cash or by issue of cheque. The whole rationale behind Rule 6 (3) is that where the service tax has been paid on amounts received for providing particular service and that service for some reason has not been provided by an assessee, he can make adjustment of the excess tax paid in the succeeding period. That rationale would be defeated if the condition of refund is insisted to be satisfied only in a particular manner. The Rule itself does not provide for particular manner of refund and if it is a common industry practice to give refund by way of credits for any particular industry, there would be no harm in allowing refund by adopting such widely accepted industry practice. What is required to be verified is that either by credit or by cheque the appellants have refunded the amounts, for which they should make available their books of accounts/computerized records or statements as may be required by the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chennai, on 26-April-2013 with regard to the refund of premium and service tax made to the insured/intermediary. 1. SCN No. LTUC/232/2009-C dated 17.08.2009 -October 2007 to Sep. 2008. In respect of refunds made by way of transfer to intermediary accounts, please find enclosed statement giving details of policy-wise refunds made during October, 2007 to September, 2008. 2. SCN No. LTUC/16/2011-C dated 06.01.2011 April 2009 to September 2009. With regard to refunds by way of credit to intermediary, please find attached statement giving details of refunds made during April 2009 to September 2009. 3. SCN No. LTUC/194/2012-C dated 22.05.2012-October 2010 to Mar. 2011. With regard to refunds by way of credit to intermediary, please find attached statement giving details of refunds made during October 2010 to March 2011. We request you to kindly go through the refund list (two box files enclosed) in respect of the above three periods and let us know the list of cases to be picked up for verification. On hearing from you, we will give you all the required particulars to enable to take up with the concerned for verification. We assure you of our co-operation in carrying out the veri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... understanding with regard to the intermediary transactions are getting the confirmation from the end customers, and not bank statement extracts. In case you wish, the same will be filed on hearing from you. Details of intermediary transactions culled out and submitted to Tribunal- Clarifications. Quoting the CESTAT's Final Order dated 13.06.2012, you have mentioned the following: However in respect of both impugned periods involved in these two cases, such details were not culled out and provided at the time of adjudication. He further states that these details have been filed with Tribunal but since these were not filed before the adjudicating Commissioner, he had no means to verify the details We would like to clarify that documents submitted by us before Tribunal was refund transactions credited to the intermediary accounts, whereas the present verification by you is for getting confirmation from the end customers. For the credit to the intermediary accounts only, we had requested your team to visit our office and have the verification done in our computer system which request is still awaiting your consideration. 10. The present adjudication is based on a report dated 30. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er he points out that this statement is inconsistent with para 12.1 of the impugned order. 13. The Ld. Advocate submits that the scope of the original demand and the show cause notice is only to verify whether the refund has been credited to the account of the intermediary and he argues that requirement as per Rule 6(3) is met when money is credited to the account of intermediary. 14. The argument of the Ld. AR is that it would appear that in the normal course the appellant was not refunding the service tax amount to the insured but only when the insured asks for such money, it was refunded. He submits that the appellant is not willing to positively state that in all cases the service tax amount was refunded by the intermediary to the insured. He points out para 12.7 of the impugned order reading as under:- Further, in prargraphs 'iv' & 'v' (page-7) of their written reply dated 12.01.2013, have stated as follows: iv) In case the insured seeks the amount lying to his credit (on cancellation of policy), then a cheque for the amount (premium + service tax) is issued to the insured. Till the insured seeks a cheque, the refund amount remains as credit in insured account. v) In case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the refunds reached only the intermediaries and not the insured. Since Appellant has a case that refund has reached the insured in most cases they should be given an opportunity to demonstrate the same. We understand the data involved is huge and verification may be possible only on test basis. Appellant seems to have made offer for demonstrating such refunds on a test basis which was not taken up by the adjudicating authority. The Commissioner has not disclosed this report of the Assistant Commissioner to the appellant and heard their submissions on the report before relying on it. The Commissioner does not appear to have had a look at the data provided. These faults need rectification. If Revenue has a case that such is the position at least a few examples will put their case on a better footing. 17. From submissions from both sides and from para 12.4 of the impugned order we are not clear as to what type of documents were submitted in hard copy and soft copy before passing the impugned order. So in the de-novo order that may be passed in pursuance of this order the appellant should describe the data given by them which description after verification should get incorporated in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
