TaxTMI 
TaxTMI 
2022 (10) TMI 59
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....talling Rs.1,38.90.41.805 for the seven years which is the cavil of Revenue in their appeal, are of M/s ICICI Prudential Life Insurance Co Ltd. 2. M/s ICICI Prudential Life Insurance Co Ltd is engaged in rendering 'life insurance service' that, before 1st July 2012, was taxable under section 65(105)(zx) of Finance Act, 1994 and operates through agents who interface with potential subscribers of the various products offered by them. The industry is under the regulatory oversight of Insurance Regulation and Development Authority (IRDA) which stipulates, as a measure of protection to policy holders, the relationship between insurance companies and the agents insofar as each individual policy is concerned. It is the contention of the tax authorities that 'non-compete fee' and 'exclusivity bonus' paid to agents from 2007 to 2011 was not consideration for such forbearance as the agents were not working exclusively for them and, hence, was 'commission', and liable to tax of Rs.24,25,76,897 on the amount disbursed by stealth beneath the radar of regulatory oversight. An amount of Rs.1,16,14,038 was demanded on 'reward and recognition' paid in 2007-08 and 2008-09 and Rs.4,90,27,118 was dem....
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....rance Co Ltd v. Commissioner of Central Excise, Mumbai [2017 (49) STR 301 (Tri- Mumbai)] on an identical dispute arising from the allegation of having retained the tax to be deposited by the recipient of service under 'reverse charge mechanism' in service tax law. Learned Authorized Representative contends that the said decision has not been accepted by Revenue and its pendency in appeal should have precluded reliance on that by the adjudicating authority. 5. The right of a disputant to carry decisions of the Tribunal to the next level in the appellate hierarchy embodied in the tax statute is not to be detracted from but the mere filing of an appeal does not alter the authority of the order so impugned unless it be stayed or until it be overruled. As an adjudicating authority, expected to be compliant with judicial discipline, the correct approach on his part cannot be faulted. Nor has Learned Authorized Representative been able to adduce any decision to the contrary. Furthermore, several decision of the Tribunal have, thereafter, reaffirmed the interpretation in Bajaj Allianz Life Insurance Co Ltd and others v. Commissioner of Central Excise & Service Tax, Pune-III [2019-TIOL-274....
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.... way, on behalf of or instead of the provider of service). This is the general arrangement of payment of service tax. 20.4 The above provisions indicate that M/s. HDFCSLICL is not supposed to collect any amount of service tax from the provider of service, namely, the insurance agent and if they do so, to that extent they are not eligible for availing Cenvat credit also. Looked from either perspective of Cenvat Credit Rules or from the perspective of service tax Credit (sic) Rules, the recipient of service is required to deposit the service tax if he has collected any amount from any person which he is not required to collect. The collection of amount of service tax from the provider of service by the recipient would negate the very principle of indirect taxation where the provider of service collects the tax from the recipient of service and pays to the Government, i.e., the incidence of tax is passed on to the recipient of service by the provider of service. Therefore, the provisions of Section 73A(2) should cover the situation involved in the current case where the recipient has, instead of paying the service tax from his own pocket has recovered a part of the amount from the ....
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....or the commission amount but, even if it was issued, it is moot that the invoice would incorporate the tax amount considering that the insurance agent is not required to credit the tax to the Central Government - a responsibility devolving on the appellant as recipient of the service under the special provision of empowerment in proviso to Section 68(2) of Finance Act, 1994. Even if it did, the amount so indicated would, as per the agreement for partial contribution, be less than the amount credited to the Central Government. For that reason the cited decisions do not sustain the recourse to recovery in the impugned order. xxxxxx 9. In service tax levy, too, the person liable to pay the tax is required to deposit the tax amount irrespective of the quantum or stage of recovery from the person who bears the burden of tax. There is a distinct dichotomy, in both Central Excise Act, 1944 and Finance Act, 1994, of the obligation to credit the tax with Central Government and the recovery of the amount from the other person. And that is a dichotomy that does not brook any latitude whatsoever and its acceptance by Revenue is amply evidenced by Circular No. 870/8/2008-CX, dated 16th May,....
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....ions of the respondent under the contract would be borne by the respondent.', it was held that '11. The contractual obligation to reimburse the tax paid by the person designated to do so by law is, thus, not tax collected in any manner warranting recourse to Section 73A of Finance Act, 1994. 12. The appellant has paid the tax on commission paid to agents on 'reverse charge' basis and appellant is, under Cenvat Credit Rules, 2004, entitled to take credit of such tax paid. Contribution, partial or entire, to the tax liability in an agreement with the provider of the service is not forbidden by law. To the extent that the contributor has not ventured to avail credit of such contributions, there is no detriment to public revenue. And to the extent that the appellant has not deprived the provider of the service of any amount in excess of the tax deposited by the appellant, there can be no substance to the allegation that appellant has contravened Section 73A of Finance Act, 1994.' 6. Consequently, the appeal of Revenue is without any source of sustenance and merits dismissal. 7. In so far as the demands under section 73(1) of Finance Act, 1994 is concerned, we have already not....
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.... tax to the extent of payments made thereafter amounting to Rs.50,49,109 was erroneously demanded. No counter to this submission has been made by Learned Authorized Representative. It is the contention of Learned Chartered Accountant that demand of Rs. 65,64,929 remaining thereafter is not liable for recovery beyond the normal period of limitation in view of revenue neutrality as held by the Tribunal in Nirlon Ltd v. Commissioner of Central Excise, Mumbai [2015 (320) ELT 22 (SC)] and in Jet Airways (I) Ltd v. Commissioner of Service Tax, Mumbai [2016 (44) STR 465 (Tri-Mumbai)]. There has been no averment that this plea was made before the adjudicating authority. It would, therefore, be appropriate to have these aspects of payments towards 'rewards and recognition' adjudicated afresh by the jurisdictional Commissioner. 10. It has been submitted by Learned Chartered Accountant that payment towards 'market support' rendered by M/s India Infoline Services Ltd for the period from 1st October 2007 to 31st March 2008 on which tax of Rs.4,90,27,118 has been confirmed in the adjudication order was, in reality, towards salaries of employees hired by the agent for sale of policy at the behes....