TaxTMI 
TaxTMI 
2024 (7) TMI 1401
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....ner] confirming the demand of service tax by invoking the extended period of limitation contemplated under the proviso to section 73 (1) of the Finance Act, 1994 [the Finance Act]. The Commissioner has also disallowed CENVAT credit availed and utilized by the appellant. Penalties have also been imposed upon the appellant under various sections of the Finance Act. 2. The appellant is a company incorporated under the provisions of the Companies Act, 1956 and is engaged in the business of insurance. It entered into a Memorandum of Understanding [the Memorandum] dated 08.08.2007 with Dena Bank, Mumbai [the Bank], under which the Bank agreed to provide adequate space and specific facilities such as working desk and chair in mutually selected ....
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....as paid by the appellant to the Bank. 6. A show cause notice dated 21.01.2011 was issued to the appellant proposing demand of service tax and reversal of CENVAT Credit and the details are summarized as below: Period of dispute May, 2006 to June, 2010 April, 2008 to March, 2009 April, 2008 to March, 2009 Demand Rs. 1,67,95,997 (Service Tax) Rs. 3,09,000 (CENVAT credit) Rs. 1,13,043 (Service Tax) Penalty Rs. 1,67,95,997 Rs. 3,09,000 Rs. 1,13,043 Issues Demand of service tax under 'insurance auxiliary service', for services received from the Bank. Denial of CENVAT credit of Group Health Insurance policy for employees. Demand of service tax on alleged short acco....
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....vite liability of the appellant on the amounts paid to Dena Bank; (iii) The Bank has paid service tax under the category of 'business support services'. Since service tax already stands paid by the Bank, the same cannot be collected twice; (iv) The appellant has received 'business support services'; (v) Service tax on the provision of service stands deposited by the Bank under forward charge. Hence, the demand proposed against the appellant under Reverse Charge Mechanism would amount to double taxation; (vi) Denial of CENVAT credit on Group Health Insurance Services for employees, is untenable; (vii) There is no case of short accounting of insurance premium and thus, no differential tax is payabl....
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....arned authorized representative appearing for the department have been considered. 13. As noticed above, there are three issues to be decided in this appeal. INSURANCE AUXILIARY SERVICE 14. The Commissioner has confirmed the demand, holding that the Bank is providing 'insurance auxiliary services' as an 'insurance agent' to the appellant and the appellant would be liable to pay service tax under Reverse Charge Mechanism in terms of rule 2(1)(d)(iii) of the Service Tax Rules, 1994 [the 1994 Rules]. 15. It is seen that in terms of the Memorandum, the Bank had agreed to provide space to the appellant in the designated branches where the representatives of the appellant were to be stationed for the purpose of soliciting insurance bu....
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....rance agent licensed under section 42 who receives or agrees to receive payment by way of commission or other remuneration in consideration of his soliciting or procuring insurance business including business relating to the continuance, renewal or revival of policies of insurance;" 20. It, therefore, follows that the services rendered by an insurance agent, who is duly licensed under section 42 of the Insurance Act to be so, to an insurance company in relation to general insurance businesses are taxable as "insurance auxiliary services". It is not the case of the department that the Bank is a holder of a license under section 42 of the Insurance Act to act as an "insurance agent", nor such a finding has been recorded by the Commissioner....
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....ed under the definition of "input service" and, therefore, the appellant was entitled to avail CENVAT Credit. 25. This issue has been decided in favour of the appellant by a Larger Bench of the Tribunal in Reliance Industries Ltd. vs. Commissioner of Central Excise and Service Tax, (LTU), Mumbai [2022 (60) G.S.T.L. 442 (Tri.- LB)]. Thus, the demand confirmed under this head cannot also be sustained. SHORT ACCOUNTING OF INSURANCE PREMIUM 26. According to the appellant, it correctly reported its premium for the purpose of calculating service tax liability and there is no short accounting. The appellant has stated that as per the audited trial balance of the Regional Office at Delhi, the total premium is Rs. 253,63,68,125/- and becaus....