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2015 (5) TMI 740 - CESTAT NEW DELHI

2015 (5) TMI 740 - CESTAT NEW DELHI - 2015 (40) S.T.R. 615 (Tri. - Del.) - Waiver of pre deposit - Denial of CENVAT Credit - Reinsurance business - Held that:- Prima facie, when the applicant undertake the insurance, i.e. the insurance date of commencement of risk by the insurance company for covering the insurance of Policy holder and that service has to be provided for a particular period of time as per the agreement. So, the output service is provided by the applicant till the termination of .....

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And R K Singh, Member (T),JJ. For the Appellants : Shri V Lakshmikumaran, with Manish Gaur & Narender Singh Advs. For the Respondent : Shri Govind Dixit, AR ORDER Per: Ashok Jindal: The applicant is seeking waiver of pre-deposit of an amount of ₹ 115,78,81,098/- along with interest and equivalent amount of penalty under section 78 of the Finance Act, 1994. The period of dispute is from November, 2008 to March, 2012. 2. The facts of the case are that applicant is an insurance company a .....

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India. For service of reinsurance received from the Indian Insurance Co. they are paying the service tax and taking credit thereon. For service received of reinsurance from outside India, the applicant is paying service tax under reverse charge mechanism and availing credit thereof. For motor 3rd party insurance for motor vehicle, there is a mechanism as per IRDA Rules. As per that mechanism, the pool is formed of all the insurance companies and the applicant is part thereof. At the end of each .....

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rvice tax on the amount insurance premium. It was also found that the applicant has taken Cenvat Credit of service tax on the service tax paid by reinsurance company which has been categorized as under: A. The invoices issued by reinsurer company; and B. The invoices issued by pool member of the company on third party motor vehicle insurance their respective to share. Therefore, it was alleged that pool arrangement is sort of collective insurance as to which company is reinsurer company among ot .....

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by the other insurance companies do not appear to be proper document as per Rule 9 of the Cenvat Credit Rule, 2004 to avail Cenvat credit as the invoices issued by the other insurance companies against which the applicant has availed input service credit have not provided the insurance services to the applicant. Therefore, it was alleged that applicant is not entitled to take Cenvat credit on the invoices issued by reinsurer or the pool members to the appellant under Rule 2(l) of the CCR, 2004 a .....

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rvice tax is entitled to take Cenvat credit on the service tax paid by them on the services received by them. Therefore, whatever service tax has been paid by them, is entitled to Cenvat credit. Further, he submits that as per Rule 9 of the CCR. 2004, the invoices issued by a service provider is a proper document against which they have taken the Cenvat credit. He further submits that a similar issue came up before this Tribunal in the case of PNB Metlife India Insurance Co. Ltd. vs. CCE [2014 ( .....

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Therefore, the services received by the applicant have no nexus with the service provided by the applicant as Rule 2(l) of the CCR, 2004. For availment of Cenvat credit on third party motor vehicle insurance, he submits that there is a pool and applicant himself is a member of pool and therefore whatever services, they have provided, that service is provided by the members of pool to each other. The services received by the applicant is the service provided by the applicant as member of pool to .....

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the applicant. 5. Heard the parties. Considered the submissions. 6. In this case, prima facie, we are having two issues namely (A) whether the appellant is entitled to take input service credit on reinsurance service under Rule 2(l) of the CCR, 2004 or not and (B) whether the appellant is entitled to avail input service credit on the invoices issued by reinsurance company who is a member of pool as per Rule 9 of the CCR, 2004 without receiving the service. 7. For the first issue, the core reaso .....

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