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of <h1>Tribunal Allows Appeal: Commission Agent Exempt from Service Tax Under Notification No. 3/2000-ST for Govt Insurance Schemes.</h1> The appellant's appeal was allowed by the Tribunal, which set aside the impugned order. It was determined that the appellant, acting as a Commission Agent ... Levy of service tax - Business Auxiliary Service - receiving commission on the collection of premium of Crop Insurance Service from M/s. Agriculture Insurance Company of India Limited, Ahmedabad - Both the lower authorities have demanded service tax on the ground that service provided by the appellant is not an insurance service. HELD THAT:- From the plain reading of the N/N. 3/2000-ST dated 06.07.2000, it is clear that exemption is not provided to a specific service of insurance but all the services if it is provided in relation to general insurance business provided under National Agricultural Insurance Scheme or the pilot scheme on Seed Crop Insurance or the Farm Income Insurance scheme - In the present case, the appellant have admittedly provided service for collection of premium in relation to the general insurance business provided under the aforesaid government scheme. Therefore, the appellant are clearly eligible for the exemption notification. On careful perusal of the Commissioner (Appeals) order, though he has recorded the claim of notification by the appellant but except for the general findings, no specific finding on the admissibility of notification 3/2000-ST was given. However, on reading and interpretation of the notification 03/2000-ST, it does not give scope for denial of exemption - the appellant are entitled for the exemption notification 3/2000-ST and not liable to pay any service tax on the commission received in relation to general insurance under government’s various schemes. The impugned order is set-aside and the appeal is allowed. Issues involved: The issue involves the liability to pay service tax on the commission received from M/s. Agriculture Insurance Company of India Limited under the category of Business Auxiliary Service, and the applicability of Notification No. 3/2000-ST dated 06.07.2000 for exemption.Liability to pay service tax on commission received:The appellant received commission on the collection of premium of Crop Insurance Service from M/s. Agriculture Insurance Company of India Limited. The department contended that the appellant is liable to pay service tax on the commission received under the category of Business Auxiliary Service. The demand of service tax was confirmed and upheld by the learned Commissioner (Appeals), leading to the filing of the present appeal.Applicability of Notification No. 3/2000-ST for exemption:The appellant argued that their service is exempted under Notification No. 3/2000-ST dated 06.07.2000, which exempts taxable services in relation to general insurance business provided under specific government schemes. The appellant contended that the commission received from clients on insurance premium and related activities falls under the exemption, as it is in relation to the specified insurance schemes. The appellant pointed out that in a similar case, the Additional Commissioner had dropped proceedings on identical grounds.Judgment:After considering the submissions and examining the facts, it was found that the appellant provided services as a Commission Agent for the collection of premium in relation to insurance under the Government's various schemes. The lower authorities had demanded service tax on the basis that the service provided was not an insurance service. However, the Notification No. 3/2000-ST provides exemption to all services provided in relation to general insurance business under specific government schemes, including the one in question. Therefore, the appellant was deemed eligible for the exemption and not liable to pay any service tax on the commission received. The impugned order was set aside, and the appeal was allowed.Separate Judgment by Judges:The judgment was pronounced in the open court on 19.06.2023 by HON'BLE MR. RAMESH NAIR, MEMBER (JUDICIAL) AND HON'BLE MR. C.L. MAHAR, MEMBER (TECHNICAL).
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