TMI Blog2014 (4) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... x on Insurance Auxiliary Service by the appellants. There is no one to one correlation required between the input service and the output service under the CENVAT Credit Scheme and, therefore, the demands confirmed against the appellants for recovery of CENVAT Credit availed by them for discharging Service Tax liability on Insurance Auxiliary Service is clearly unsustainable - Decided in favour of assessee. - Appeal No. ST/64, 66, 198/08 & ST/237 & 218/12 - Final Order Nos. A/131-135/2014-WZB/C-I(CSTB) - Dated:- 22-1-2014 - Mr. P R Chandrasekharan and Mr. Anil Choudhary, JJ. For the Appellant : Shri V Sridharan, Sr Adv. and Shri S S Gupta, CA For the Respondent : Shri K M Mondal, Spl Consultant JUDGEMENT Per: P R Chandrasekharan: There are four appeals directed against Orders-in-Original No. 09-10/Commr(AK)/08, No. 43/PKA/COMMR/Th-II/2011 dated 23.1.2012. and NO. V/Service Tax(HQ)Adj./Birl/65/2006 and one appeal filed by Revenue against Order-in-Original NO. 02/STC/SJS/08-09 dated 23.5.2008 passed by the various Commissioners as adjudicating authorities. The appellants are M/s TATA AIG Life Insurance co. Ltd., M/s ICICI Prudential M/s Birla Sun Life. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for removal of doubts, it is hereby clarified that if a person liable for paying Service Tax does not provide any taxable service or does not manufacture final products, the service for which he is liable to pay Service Tax shall be deemed to be the output service . 3.1 The above explanation was omitted from 19.4.2006 by CENVAT Credit (Third Amendment) Rules, 2006. As per Rule 2(q), the term person liable for paying Service Tax has the meaning as assigned to it in clause (d) of sub-rule (1) of rule 2 of the Service Tax Rules, 1994 . As per Rule 2(r) of the said Rules provider of taxable service includes a person liable for paying Service Tax. 3.2 The appellants are liable to pay Service Tax on Insurance Auxiliary Service received by them in terms of Rule 2(l)(d) (iii) of the Service Tax Rules, 1994 read with Section 63(2) of the Finance Act, 1994. A combined reading of Rules, 2(p),(q), (r) makes the position absolutely clear that for the purposes of Service Tax Act, the appellants are the providers of Insurance Auxiliary Service and liable to pay Service Tax and, therefore, they are rightly entitled to avail input service tax credit on the various input services recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of ITC Ltd. 2011 (23) STR 41, had taken a view that a person deemed as provider of taxable service' received by him cannot be treated as a provider of taxable service under Rule 2 (r) and, therefore such a person, has to pay Service Tax in cash and not by utilization of CENVAT Credit. Reliance is also placed on the decision of the Tribunal in the case of Panch Mahal Steel Ltd. 2008 (12) STR 447 (Tri-Ahmd), wherein the matter was referred to Larger Bench with regard to the question whether Service Tax on receipt of service can be paid by utilizing input service credit. Reliance is also placed on the decision of the Tribunal in the case of Alstom Projects India Ltd. 2008 (12) STR 23, where in the case of Goods Transport Agency Service, it was held that the same remains an input service even after deletion of explanation to Rule 2 (p) and, therefore, utilization of credit for payment of Service Tax under the category of Goods Transport Agency Service is not permissible. Accordingly, it is submitted that the appellants were not entitled to use input service credit for payment of Service Tax on the output service of Insurance Auxiliary Service. 5. We have carefully consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xiliary Service by the appellants. This is the settled legal position as can be seen from the decisions of the Hon'ble Punjab Haryana High Court and Hon'ble Delhi High Court in the case of Nahar Industrial Enterprises Ltd., Nahar Spinning Mills and Auro Spinning Mills Hero Honda Motors Ltd. (sjupra). The Hon'ble Delhi High Court rejected the contention of the Revenue that recipient of Goods Transport Agency service has to discharge Service Tax liability in cash as they were only recipient of Service and not the provider on the ground that a fiction has been created under Section 68 (2) of the Finance Act, 1994 deeming the service recipient as a service provider and, therefore, such legal fiction has to be given full effect. Similarly, in the case of Kansara Modler Ltd. (supra) this Tribunal has held as follows:- If we read Rule 2(q) of Cenvat Credit Rules with Rule 2(1)(d)(iv), we find that appellant is a person liable to Service Tax. Once appellant is person liable to service tax, he becomes provider of taxable service under Rule 2(r) and consequently becomes output service provider under Rule 2(p) of the Cenvat Credit Rules. Revenue is also relying on Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X
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