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TMI Blog2023 (7) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... Business and they are registered with Service Tax authority under the category of General Insurance Service. A show cause notice dated 30.03.2009 was issued to them demanding service tax of Rs.29,51,39,734/- along with interest and penalty, on the ground that they have not paid service tax on the reinsurance premium paid as well as received during the period 01.05.2006 to 31.03.2008. The Notice also proposed to appropriate an amount of Rs.29,51,39,727/- already paid by the Appellant. The Notice was adjudicated and the demand of service tax was confirmed vide Order - in- Original dated 01.12.2009, wherein the demand of service tax was confirmed along with interest and penalty equal to service tax was imposed under Section 78 of the Finance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em. Also, since they were under provisional assessment, the demand, if any, could have been taken care of at the time of finalization. Hence, they contended that the penalty is liable to be set aside. 5. The Ld A.R. for the department reiterated the findings in the impugned order. He also contended that penalty imposable under section 76 of the Finance Act , 1994. 6. Heard both sides and perused the appeal records. 7. We observe that the issue involved in the present appeal is related to the leviability of service tax on the amount paid to foreign insurance companies for reinsurance as well as on the amount received by them from other insurance companies in the domestic sector during the period May'06 to March-08. The department contende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o pay interest towards is this liability, if not already paid. 9. We observe that the impugned order has imposed penalty of Rs.29,51,39,734/- under section 78 of the Finance Act, 1994. The Appellant contended that there was no intention to evade service tax in this case. The Appellant has not included the re-insurance premium paid by them to foreign companies as well as received by them from domestic insurance companies in the ST-3 returns. The adjudicating authority considers this omission as suppression of fact for the purpose of imposition of penalty under section 78 of the Finance Act, 1994. 10. The Appellant has relied upon the following decisions to support their argument that penalty not imposable when tax was not paid on the bona f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C.I. Logistics Ltd. v. Commr. of CGST & C.Ex., Kolkata North [2021 (54) G.S.T.L. 27 (Tri.-Kolkata)] "7.I find that penalty has been imposed by the authorities below with the finding that the appellant had not deposited service tax on the basis of own ascertainment and that it was only after the CERA audit was undertaken, the short payment of tax was detected. I find that the very SCN was issued in the year 2014 for which the compliance was already made by the appellant in 2011 by way of payment of tax and interest soon after the short payment was detected. The only allegation in the SCN is that the appellant-assessee has not deposited service tax on their own ascertainment. I find that when the tax amount stands already deposited with int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion about limitation and sought benefit of section 73 (3) and section 80 of the finance Act, 1994. As regard the limitation we find that the issue about taxability on rever charge basis in respect of service received from foreign based service provider was not free from doubt as the issue was finally decided by the Hon'ble Supreme Court in a landmark judgement in the case of Indian National Shipowners Associations. Moreover the appellant have paid the entire service tax even for the period prior to its levy ie.. before 18-4-2006 and the appellant have filed ST-3 returns wherein details of payments have been declared. In this fact we are of the view that demand for the extended period is not sustainable. We further find that the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery. It is a "deemed warehouse". It is so recognised by the Central Government. This is not in dispute. The very purpose behind giving the status of "deemed warehouse" to the refinery is to provide exemption to the RFO which is used for producing petroleum products. That status is not meant for producing products which are not petroleum products. In other words, the Deemed Warehouse Status demands nexus to the final product cleared from it. Generation of electricity, if captively consumed, is exempted from duty. This is because electricity which is generated in the refinery is used to operate the various processes within the refinery. In the refinery, there exists large number of processes. Each process generates an item and, therefore, eve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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