2022 (10) TMI 923

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....zzf) to a policy holder, by an insurer carrying on life insurance business, in relation to management of investment, under unit linked insurance business known as Unit Linked Insurance Plan (ULIP) Scheme." Explanation - for the purposes of this sub-clause - (i) Management of segregated fund of unit linked insurance business by the insurer shall be deemed to be the service provided by the insurer to the policy holder in relation to management of investment under unit linked insurance business; and (ii) the gross amount charged by the insurer from the Policy Holder for the said services provided or to be provided shall be equivalent to the difference between - (a) premium paid by the Policy Holder for ULIP, and (b) the sum of premium paid for or attributable to risk cover-whether for life, health or other specified purposes and the amount segregated for actual investment. The aforementioned Explanation (II) has been substituted w.e.f. 1.7.2010 vide notification no.24/2010-ST dated 22.06.2010, as follows:- "(ii) the gross amount charged by the insurer from the policy holder for the said service, provided or to be provided ....

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....lant have not disclosed the material facts of receipt of these charges and non-payment of service thereon in their Service Tax Returns submitted to the Department, which appears to be deliberate suppression with intent to evade payment of tax. Had the Audit team not visited the appellant premises for audit, the above facts of tax skipped assessment would have remained unearthed. Hence, proviso to Section 73 (1) and 73 (4) of the Act for extended period of limitation are invoked. The show cause notice was adjudicated on contest vide order-in-original dated 13.01.2016 by the ld. Commissioner, who vide impugned order was pleased to confirm the proposed demand of Rs.53,60,48,134/-. Further confirmed interest under Section 75 of Rs.1,19,011/-. Further, imposed penalty of equal amount under Section 78. Rs.10,000/- under Section 77 for failure to assess the value of the taxable service correctly. So far the issue of limitation raised by the appellant, the extended period is not invokable, the said ground was rejected and held against the assessee. Being aggrieved, the appellant is in appeal before this Tribunal. 8. Ld. Counsel for the appellant, Shri Sanjeev Sachdeva urges that the iss....

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....e legislative lacuna. Relevant extract from 2.5.3 of the said Report of the CAG is reproduced below:-  "The stand taken by the assesses was that the definition of taxable service under Section 65(105)(zx) of the Act, ibid, relating to Life Insurance business covered only services provided in relation to the risk cover in life insurance until the statutory provision itself was amended with effect from 1 May, 2011. The scope of Life Insurance Service was expanded from 1 May, 2011 to cover both risk and management of investment components. Thus, the mismatch between the provisions of Section 65(105) (zx), 65(105)(zzzzf)  of the Act, ibid, and TRU's DO letter dated 26 February, 2010 resulted in loss of revenue during the period 1 July, 2010 to April, 2011. As amendment to Section 65(105)(zzzzf) with effect from July, 2010 had not been synchronized with the scope of coverage in section 65(105)(zx), certain elements got excluded from levy under either head of service resulting in loss of revenue...." Further, relies on the order of the Commissioner in the case of Canara HSBC Oriential Bank of Commerce Life Insurance Co. Ltd., wherein the ld. Commissioner held that t....

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....ice tax on the Fund Management Charges in accordance with the IRDA guidelines. I am therefore of the view that the submissions of the Noticee has merit and since the Noticee has paid service tax on the fund management charges received in respect of the Management of Investment under ULIP services as per the provisions existed during the impugned period, the demand raised through the impugned show cause notice is not backed by the legal provisions existed during that period and therefore is liable to be dropped." It is submitted that the Department did not file any appeal against the said order of the Commissioner dated 31.03.2017 and therefore the same has attained finality. 11. So far limitation is concerned, ld. Counsel urges that the show cause notice is bad for invocation of extended period for the following reasons:- A. Regular scrutiny of the records and financial statements of the appellant by the Revenue authorities, including detailed investigations by the DGCEI. On the basis of their investigation a show cause notice dated 16.04.2014 was issued by the DGCEI. DGCEI did not propose any demand for the period from 01.07.2010 to 30.04.2011, on Policy Administrat....