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TMI Blog2021 (3) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.2015 respectively. Certain records were taken and statements were also recorded. Preliminary scrutiny of records and statements revealed that the appellants had entered into an agreement with the car manufacturer M/s. Toyota Kirloskar Motor Company Pvt. Ltd. for issuance of insurance policies through their dealer network. These car dealers collected premium from the customers and issued policies to them by accessing the portals of the insurance brokers. For insuring the vehicles, the dealers/manufacturers are given payout calculated at a given percentage on Own Damage (OD) premium by the insurance companies. For receiving such payouts, the dealers are raising invoice containing description of services in the nature of "Provision of space, Computer, Internet and administrative support", though such services were never provided to the General Insurance Company, i.e., the appellant herein. (iii) Service Tax was also collected by the dealers in these invoices from the appellant. The appellant availed CENVAT Credit of the Service Tax reflected in such invoices. (iv) The Department was of the view that no service has been provided to the appellant by the car dealers and that the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d their services are covered under 'Business Support Services'. The dealers, in their capacity as service providers, have paid Service Tax and the appellant has borne incidence of the same. 3.2.2 That there is no dispute that the services in question are directly used for the taxable output services provided by the appellants. Once the Department has accepted the remittance of Service Tax, they cannot take a contrary stand and deny credit at the service recipient's end. 3.3.1 He further submitted that the dealers/service providers have always stated the description of service in their invoice as per Rule 4A of the Service Tax Rules, 1994. The description of service given in the invoice is in the nature of infrastructure support services and the dealers/service providers have accordingly remitted Service Tax. That this fact has never been disputed by the Department. No Show Cause Notice has ever been issued to the dealers/service providers for non-compliance of Rule 4A of the Service Tax Rules, 1994, for any discrepancy in issuing the invoices. That, in other words, the Department has acceded to the description of service in the tax invoice issued by the service provider and has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arious input services. The allegation that the appellant has suppressed facts with the intention to evade payment of Service Tax is therefore without any basis. 3.7 He prayed that the impugned order may be set aside. 4.1 On behalf of the Department, Ms. T. Usha Devi, Learned Authorized Representative, appeared and argued the matter. She supported the findings in the impugned order. She read out paragraph 3.1.2 to 3.3.2 of the order emphasizing on the statements of Mrs. Lavanya Kumaraguru, Deputy General Manager, M/s. Lanson Motors Pvt. Ltd., Chennai (Dealer of M/s. Toyota) and Shri G. Suresh Kumar, Senior Accounts Manager, M/s. Harsha Automobiles Pvt. Ltd., Chennai recorded at the time of investigation. 4.2 It is argued by her that the payouts given by the appellant to the dealers are nothing but commission paid to them for the premium collected from the customers. Such commission/payout is described in the invoice as providing computing network connectivity through extranet, Internet space, Furniture and Fixtures, etc. That such services, as described in the invoices, have never been provided by the dealers to the appellant. Since no service has been provided by the dealers to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsumables, salary of staff, computers, printers, electronics and electricity"; (iii) the Dealers accordingly raised invoices on the insurance companies in the format provided to them and (iv) the Dealers have not provided the services as mentioned in the description of the invoices. In other words, the description of the services contained in the invoices used for availing Cenvat Credit do not reflect the true description of the services." 6.2 From the above, it can be seen that the case of the Department is that the payout paid by the appellant to the dealers on the OD premium collected by the dealers from the customers is camouflaged as service provided by the dealers to the appellant; that therefore, the services contained in the invoices have actually not been provided by the dealers to the appellant and thus, CENVAT Credit is not eligible. 7.1 Though in the Show Cause Notice the main allegation is that the description of services in the documents on which credit has been availed is not correct, at the time of adjudication, the main finding is that no services have been provided by the dealers to the appellant and that therefore credit is not eligible. At this juncture, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax paid by them to service provider when payment of service tax by the appellant for the service rendered by service provider is not in dispute and that it is settled, the assessment to tax at the hands of the service provider end cannot be questioned in the hand of service receiver (appellant in this case)" 8.2 The brief facts of the said case are that the appellant therein had availed input service credit on "Multi Protocol Label Switching" (MPLS) service based on the invoices issued by M/s. Brakes India Ltd., Chennai ("M/s. BIL" for short). The appellants were job workers for M/s. BIL. The services were utilized by M/s. BIL for communicating and retrieving the data from the appellant's therein. The Department alleged that the services were rendered by BSNL and Reliance Communications Ltd. to M/s. BIL and that M/s. BIL had raised invoices on the appellants claiming reimbursement under these invoices as MPLS charges along with Service Tax. The Department was of the view that the invoices were raised for reimbursement of expenses and that no service was rendered by M/s. BIL to the appellants and that the appellants were not eligible for credit. The appellants therein had contended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to BIL. Therefore, the question would be as to whether the department can dispute the nature of transaction at this juncture, more particularly, when the assessment made on the BIL and the collection of Service Tax on them has not been reopened. 15. From the reasons assigned by the Commissioner (Appeals), we find that the Commissioner (Appeals) has travelled beyond the scope of allegation made in the show cause notices. By giving a different interpretation to the nature of transaction, which, in our considered view, could not have been done by the Appellate Authority in the light of the settled position with regard to the Service Tax liability admitted and paid by BIL. Thefore, unless and until, the assessment on BIL had been reopened, the nature of transaction as referred by BIL has to be held to be wrong and the Commissioner (Appeals) could not have given a different interpretation to the nature of claim made by the BIL from the assessees by interpreting the terminalogy used in the invoice. The correct test, which ought to have been applied by the Adjudicating Authority, Appellate Authority and the Tribunal, is as to what is the character of payment made by the assessees on wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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