TMI Blog2022 (2) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... eing pooled through a mechanism provided by IRDA. These directives had statutory force and the act of the insurance companies to create such a pool was not a voluntary act. The tribunal correctly therefore was of the opinion that this pooling system is nothing but a form of re-insurance. The term reinsurance has been defined under Section 2(16B) of the Insurance Act, 1938 as to mean the insurance of portion of one insurer s risk by another insurer who accepts the risk for a mutually acceptable premium. Section 101A of the Act makes it compulsory for every insurer to re-insure such percentage of the sum insured on each policy as may be specified by the authority with a previous approval of the Central Government. Appeal dismissed. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee carried the matter in appeal. The tribunal allowed the appeal mainly proceeding on the basis of the judgment of the Division Bench of the Karnataka High Court in case of Commissioner of Central Excise, Bangalore Vs. PNB Metlife India Insurance Co.Ltd. reported in (2015) 51 GST 504 (Karnataka) . The Tribunal noted that the decision of the PNB Metlife (supra) had been accepted by the revenue. In the said case, the Court was concerned with the allowability of the service tax paid on re-insurance premium as input service. The Division Bench referred to the provisions contained in rule 2(l) of the CENVAT Credit Rules, 2004 and observed that such reinsurance was required in terms of Section 101A of the Insurance Act, 1938. The High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s having nexus with the output service, since the re-insurance is a statutory obligation and the same is co-terminus with the Insurance Policy. We only re-iterate that the issuance of insurance policy by insurer, and then taking of re-insurance by it, is a continuous process, and in the facts of the present case, it cannot be said that the same would not be an input service eligible for CENVAT credit within the meaning of Rule 2(1) of the CENVAT Credit Rules 2004. 7. We may further add that the Service Tax is levied for certain service rendered and the provision of giving the CENVAT credit is so that there may not be double taxation. If a person has collected service tax, no doubt the same has to be deposited, but if in the process of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the IRDA to make regulations in respect of various matters including matter relating to reinsurance under Sections 101A and 101B of the Insurance Act. In exercise of the such powers IRDA has issued the reinsurance regulation for re-insurance of general insurance business. One of the directions issued by the IRDA in exercise of powers conferred under Section 34 of the Insurance Act was for creation of an insurance pool. All general insurers registered to carry on general insurance business were directed to collectively participate in a pooling arrangement to share all motor third party insurance business underwritten by any of the registered general insurers. In pursuance of the said directions all general insurance companies in India enter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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