2024 (7) TMI 1401
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.... by invoking the extended period of limitation contemplated under the proviso to section 73 (1) of the Finance Act, 1994 [the Finance Act]. The Commissioner has also disallowed CENVAT credit availed and utilized by the appellant. Penalties have also been imposed upon the appellant under various sections of the Finance Act. 2. The appellant is a company incorporated under the provisions of the Companies Act, 1956 and is engaged in the business of insurance. It entered into a Memorandum of Understanding [the Memorandum] dated 08.08.2007 with Dena Bank, Mumbai [the Bank], under which the Bank agreed to provide adequate space and specific facilities such as working desk and chair in mutually selected branches of the Bank to the appellant. In c....
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....cause notice dated 21.01.2011 was issued to the appellant proposing demand of service tax and reversal of CENVAT Credit and the details are summarized as below: Period of dispute May, 2006 to June, 2010 April, 2008 to March, 2009 April, 2008 to March, 2009 Demand Rs. 1,67,95,997 (Service Tax) Rs. 3,09,000 (CENVAT credit) Rs. 1,13,043 (Service Tax) Penalty Rs. 1,67,95,997 Rs. 3,09,000 Rs. 1,13,043 Issues Demand of service tax under 'insurance auxiliary service', for services received from the Bank. Denial of CENVAT credit of Group Health Insurance policy for employees. Demand of service tax on alleged short account of insurance premium income. 7. The appellant filed a detailed reply....
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....vice tax under the category of 'business support services'. Since service tax already stands paid by the Bank, the same cannot be collected twice; (iv) The appellant has received 'business support services'; (v) Service tax on the provision of service stands deposited by the Bank under forward charge. Hence, the demand proposed against the appellant under Reverse Charge Mechanism would amount to double taxation; (vi) Denial of CENVAT credit on Group Health Insurance Services for employees, is untenable; (vii) There is no case of short accounting of insurance premium and thus, no differential tax is payable; and (viii) The extended period of limitation is not invokable nor penalty is imposable, interest is also not payable. 11. Ms....
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....SURANCE AUXILIARY SERVICE 14. The Commissioner has confirmed the demand, holding that the Bank is providing 'insurance auxiliary services' as an 'insurance agent' to the appellant and the appellant would be liable to pay service tax under Reverse Charge Mechanism in terms of rule 2(1)(d)(iii) of the Service Tax Rules, 1994 [the 1994 Rules]. 15. It is seen that in terms of the Memorandum, the Bank had agreed to provide space to the appellant in the designated branches where the representatives of the appellant were to be stationed for the purpose of soliciting insurance business from the customers visiting the Bank. In lieu of the Bank providing space to the appellant, the appellant had agreed to pay fixed charges per branch to the Bank in....
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....ness including business relating to the continuance, renewal or revival of policies of insurance;" 20. It, therefore, follows that the services rendered by an insurance agent, who is duly licensed under section 42 of the Insurance Act to be so, to an insurance company in relation to general insurance businesses are taxable as "insurance auxiliary services". It is not the case of the department that the Bank is a holder of a license under section 42 of the Insurance Act to act as an "insurance agent", nor such a finding has been recorded by the Commissioner in the impugned order. In the absence of a license, a person cannot be considered as an insurance agent for treating the activities as "insurance auxiliary services". 21. The order also....
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....ibunal in Reliance Industries Ltd. vs. Commissioner of Central Excise and Service Tax, (LTU), Mumbai [2022 (60) G.S.T.L. 442 (Tri.- LB)]. Thus, the demand confirmed under this head cannot also be sustained. SHORT ACCOUNTING OF INSURANCE PREMIUM 26. According to the appellant, it correctly reported its premium for the purpose of calculating service tax liability and there is no short accounting. The appellant has stated that as per the audited trial balance of the Regional Office at Delhi, the total premium is Rs. 253,63,68,125/- and because of an error in the Annexure, the said trial balance has been recorded as 253,72,82,715/-. The appellant has enclosed the audited trial balance from which it is clear that the total premium is Rs. 253,6....