2022 (2) TMI 11

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....t objects to the respondent-assesee claiming benefit of the service tax paid on re-insurance as allowable input service. We may record that the issue pertains to the period prior to 1.4.2012. We have heard learned counsel for the parties. From the order passed by the Commissioner as the adjudicating authority, we gather that the respondent who is an insurance company, had been depositing its service tax on the amount of insurance premium. In the process the assessee had availed amount of input service credit on the basis of invoices issued by other insurance companies with whom the assessee had a pooling agreement. The Commissioner was of the opinion that the assesseee was not entitled to claim such credit. The Commissioner referred to the....

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....d would not depend on the re-insurance policy) and as such the service provided would not come within the ambit of input service, is not worthy of acceptance. The process of issuance of an Insurance Policy by the Insurer and subsequent procurement of re-insurance policy from another company (which is a statutory requirement) is an integral part of the total process. The process of insurance does not come to an end merely on the issuance of the Insurance Policy by the Insurer. In fact, it continues till the existence of the term of the policy. The re-insurance is taken by the Insurer immediately after the insurance policy is issued, as is required under Section 101A of the Insurance Act, 1938. Since re-insurance is a statutory obligation, an....

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...., as the same would amount to double taxation, which is not permissible in law.." The objection of the revenue in the present case to the applicability of the judgment of the High Court in case of PNB Metlife (supra) was that it is not a case of simple re-insurance but a case where the respondent-assesee insurance company and other insurance companies had created a common pool where such insurance liabilities were thrown in common hochpoch and at the end of the financial year the distribution was made between the pooling members. Learned counsel for the revenue had highlighted this aspect of the matter and contended that since this pooling mechanism was not a statutory requirement, the decision in the case of PNB Metlife (supra) would no....