2015 (1) TMI 729 - AT - Service Tax

Appellant granted waiver by Tribunal for interest and penalty pre-deposit request

M/s ICICI PRUDENT LIFE INSURANCE COMPANY LTD. Versus COMMISSIONER OF CENTRAL EXCISE, THANE-II

The Tribunal granted the appellant's request for waiver of pre-deposit of interest and penalty under Sections 75 and 78 of the Finance Act, 1994. The ... Waiver of pre deposit - Insurance services - whether what point of time service has been provided by the applicant and what time service tax is required to be paid by the applicant - Held that:- service tax is payable when they received service tax from the insurer. As the issue before us is that at what point of time the service has been provided to the insurer by the applicant and at what time service tax is payable, is to be decided on merits. After hearing both sides in detail. We are of the view that prima facieapplicant has made out a case for waiver of pre-deposit of interest and penalty. Accordingly, we waive the requirement of pre-deposit of entire amount of interest and penalty and stay recovery thereof during the pendency of the appeal. - Stay granted. Issues:Seeking waiver of pre-deposit of interest and penalty under Sections 75 and 78 of the Finance Act, 1994.Analysis:The appellant, engaged in providing insurance services, faced a dispute regarding the retention of service tax amount during the period between receiving a proposal for insurance and underwriting the insurance agreement. The revenue demanded interest for this intervening period, leading to the initiation of proceedings resulting in confirmed penalties. The key issue revolved around determining the point in time when the service was provided by the appellant and when the service tax was due. The appellant argued in their favor, presenting various decisions supporting their stance. The Tribunal acknowledged this as a debatable issue, warranting a detailed consideration during the final hearing. The Revenue contended that service tax was payable upon receiving it from the insurer. After thorough deliberation and hearing both parties, the Tribunal found that the appellant had established a prima facie case for the waiver of pre-deposit of interest and penalty. Consequently, the Tribunal waived the requirement of pre-deposit for the entire amount of interest and penalty, staying the recovery during the appeal's pendency.