TaxTMI 
TaxTMI 
2013 (7) TMI 1112
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.... 2. The appellant provides general insurance service. The appellant carries on its business through insurance agents, and also through institutional agents like banks and insurance brokers (collectively called as intermediaries). 3. While selling insurance policies, there are instances, where the customer rejects the policy after its issue. In fact, IRDA Regulation provide that for a period prescribed, the person taking any insurance policy should be given this privilege of refusal of the policy, after reading the terms of the policy. In a situation, where insurance policy is cancelled, the appellant refunds the insurance premium along with service tax. As per the contention of the appellant, service tax amoun....
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....s in ST-3 returns during the said period was disallowed by the impugned order. 7. The counsel for the appellant submits that they had produced the names of insured who refused the policy, and also the bank statements showing refunds to the concerned persons etc to support their case. However, they found it difficult to trace from their records, the old vouchers sanctioning the refund because of the volume of records involved and since the records were relating to a past period. So they could not produce the vouchers before the adjudicating authority in the time frame given. However they have now traced all the relevant vouchers in respect of those 47 cases. He also submits that if the Revenue needs verification of more ....
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....rediting premium and service tax in the account of the intermediary, should be taken as refund granted to the intermediaries who in turn will be refunding the amounts to the insured. The premium amounts and service tax are collected by debit to such accounts and refunds are credited to such accounts so that the work relating to receipt of cheques for each premium and writing and dispatch of cheques for each payment of refund can be avoided. The Counsel submits that this is the practice followed by the industry. On the one side Revenue considers debit to the account as receipt of premium and service tax but on the other hand does not want to recognize the credits made by appellant to the same accounts as refunds made to intermediaries ....
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....premium and service tax due on future policies that may be issued through them. Just as refund of any money cannot be return of the same currency notes, it cannot be insisted that refund in this type of cases should be made by individual cheques to be issued to the intermediary. Revenue follows such methods while granting refunds to their assesses i.e., by credit in Cenvat Account, PLA or account maintained by importers with Customs Houses, or by cheques depending on the situation. 12. If Revenue has any doubt that the full amount is not being refunded and refund from government is claimed for more than the amount actually being refunded to the insured a clear case based on facts which will prove such malpractices should be b....