TMI Blog2020 (9) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... lant is only engaged in rendering the insurance services and merely for the reason that portion of the premium amount charged in respect of ULIP policies is not liable to tax, it cannot be said that the said service is exempted output service when tax is duly paid on the portion of premium collected on risk coverage. Merely for the reason that the break-up of premium amount is shown in the policy, the fact that remains is that the policy is one and single with the feature of both risk coverage and investment opportunity simultaneously. It cannot be said that the insured i.e. the subscriber to the policy has availed two separate policies. Neither there can be a question of extending the facility for subscribing to ULIP policy with only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is engaged in insurance business offering Life Insurance Policy (Term Insurance Policy), Endowment Policy and Unit Linked Insurance Policy (ULIP). During the period in dispute, premium money collected for Term Life Insurance and Endowment Life policies were fully taxable. In the case of ULIP, the premium is collected for two components risk coverage portion and investment portion, the premium payable on the portion of risk coverage was only taxable, i.e. the premium attributable to investment portion was not taxable. Necessary break-up of premium for both the components are duly mentioned in the Policy document. 3. The appellant was availing CENVAT credit of service tax paid on commission paid to agents through whom the Policies were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Rama Holla, learned Superintendent (AR) appeared for the Revenue. 5. The learned Advocate appearing for the appellant submitted that:- (i) they were engaged in the provision of only one service i.e. life insurance service in the course of carrying out life insurance business and therefore, no exempt service has been provided by them. (ii) the customer has to purchase the ULIP as a whole and cannot choose to avail only the investment portion and not the insurance component and therefore, the services rendered by the insurance agents towards soliciting a ULIP can be considered as input service exclusively in relation to an exempt service. (iii) merely for the reason that service tax was imposed on fund management charges in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by a provider of taxable service for providing an output service ..... . In terms of the basic provisions contained in Rule 6(1) of the Credit Rules, credit shall not be allowed on input service which is used in providing exempted service. The term exempted service has been defined in Rule 2(e) which means taxable services which are exempt from the whole of the service tax leviable thereon, and includes services on which no service tax is leviable under section 66 of the Finance Act . 10. In the instant case, on perusal of the finding made by the Ld. Commissioner (in para 21 of the impugned order), we find that credit has been denied solely on the premise that the insurance service (for sale of ULIP policies) is exempted service, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices is not subject to tax which is also not the case herein, inasmuch as only one and single service is rendered. Moreover, in any case, merely for the reason that a portion of the total premium amount is taxable, which may be referred as assessable value for tax purpose, would not render the other portion of premium as exempt service which at best can be said to have been excluded from the assessable value. In view of the above reasons, we are of the considered view that no exempt service has been rendered by the appellant so as to deny credit of service tax paid on insurance agents services. 12. The Delhi Bench of the Tribunal in the case of Max New York Life Insurance Co Ltd vs. CCE ST (LTU) 2018 (363) ELT 1145 (Tri-Del) has o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice of ULIP for the insured. For such service, the tax is paid. There is no separate identifiable service attributable to investment portion of the premium in the present case. In other words the premium amount received was invested substantially and for managing such investment, administration charges are collected and Service Tax paid. No other service, least of all exempted service, could be identified in such arrangement. Hence, we are in agreement with the method of calculation adopted by the Original Authority in arriving at the portion of exempted service/taxable service. We have no reason to interfere with the said findings. 13. In view of the above findings, since no exempt service has been provided by the appellant, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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