TaxTMI 
TaxTMI 
2026 (6) TMI 583
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....pellant's perspective, these automobile dealers are the first point of contact with the buyers, and therefore, also the first point of contact with customers for availing motor insurance. To increase its customer base, the appellant enters into agreements with various automobile dealers (or manufacturers) to get access to their customers. With respect to this arrangement and the present appeal, the undisputed facts are as follows: i. The automobile dealers (or manufacturers) and Appellant have entered into agreements under which the dealers are obligated to refer insurance policies of the Appellant to their customers. The automobile dealers collect premium from the customers and create a 'policy cover note'. The premium collected by the automobile dealers is paid to the Appellant. ii. The automobile dealers are receiving consideration computed at a percentage of the premium of the policy of the Appellant issued by the dealer. iii. The dealers are discharging service tax on the consideration charged from the Appellant. iv. The Appellant has availed CENVAT credit of the service tax charged by the automobile dealers. The credit was duly reflected in....
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....IT AVAILED THEREON 2010-11 16,41,647/- 1,69,089/- 2011-12 26,96,475/- 2,77,953/- 2012-13 33,13,069/- 4,09,497/- 2013-14 33,39,229/- 4,12,729/- 2014-15 24,57,632/- 3,03,763/- TOTAL 1,34,48,052/- 15,73,031/- CENVAT Credit of service tax paid to Tata Business Support Services [Rs. 2,44,97,244 ] ix. Appellant was recognized by Tata Motors Limited ('Tata Motors') as a preferred insurance company. Tata Business Support Services ('TBSS') is the infrastructure company of Tata Motors, which provides IT support to insurance companies and car dealers through its website. TBSS was raising monthly invoices on the Appellant for recovering 'infrastructure support charges', along with service tax. x. However, automobile dealers have not provided any service other than collection of premium to the Appellant. Invoices for infrastructure support charges were nothing but commission paid by the Appellant to Tata Motors. xi. Since TBSS has not rendered any input service to the Appellant, the Appellant could not have availed credit on the strength of such invoices. The Impugned Order has also confirmed the invoca....
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....e to the appellant or not? The said issue has been examined by this Tribunal in the case of Cholamandalam MS General Insurance Co. Limited (supra) wherein this Tribunal observed as under:- 6.1 The allegation of the Department is that no services have been provided by the dealers to the appellant as per the invoices and therefore, the appellant is not eligible to avail credit of the Service Tax reflected in this invoices. In paragraph 31 of the Order-in-Original dated 30.01.2017, the crux of the allegations of the Department has been recorded by the Original Authority, as under: "31. On careful consideration of the statements of personnel of M/s. Chola and Dealers, I find that (i) The payment made by M/s. Chola to M/s. Hyundai / Dealers of Motor Vehicles is only a percentage of OD premium collected and the said payout details are calculated by the Head Office of M/s. Chola and communicated to the Dealers; (ii) M/s. Chola could not term such payout as commission (which would be in violation of IRDA guidelines) and hence the Dealers were given prescribed format to raise invoices as if they provided "computing network connectivity through extranet....
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....n the invoices in the instant case admittedly were not provided by the Dealers. Only after the in-depth investigation conducted with the Dealers, the fact of Dealers issuing invoice with the description suggested by the Taxpayer have come to light. Hence their contention that department cannot approbate and reprobate in the same case is not valid." 7.3 It is not disputed that the dealer has paid Service Tax on the services described in the invoices. If that be so, the denial of credit at the recipient's end cannot be justified by the Department without reopening the assessment at the dealer's end. 8.1 A similar issue came up for consideration in the case of M/s. Modular Auto Ltd. (supra). The substantial questions of law considered in the above case are as under: "2. The above appeals are admitted on the following substantial questions of law; a) When the service provider was not before the Tribunal, whether the Tribunal can go into the question as to whether the said service provider had provided service to the appellant or not, more so when the said service provider has been assessed to service tax under Business Support Service for the service....
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....d on short path lables rather than long network addresses in high-performance telecommunication association. Referring to a chart showing the working methodology, it is submitted that it is a facility created and the beneficiary is BIL and no input service is rendered by the BIL to the assessees for them to claim Input Tax Credit. 13. To test the correctness of the said submission, we give the following illustration, which is broadly the nature of transactions done by the assessees with BIL. 14. The BSNL / Reliance Communications Private Limited have provided the MPLS facility to BIL and assuming the amount to be paid is Rs.100/- towards the cost and Rs.10/- towards the Service Tax, when the invoice is raised by the BSNL/Reliance Communication Private Limited for the said amount and the BIL has paid Rs.110/- to BSNL/Reliance Communication Private Limited, which includes the cost as well as Service Tax element, the BIL, in turn, has raised an invoice on the assessees claiming proportionately the costs which they have incurred to BSNL/Reliance. By way of illustration, if Rs.20/- has been passed on to one of the assesses, a sum of Rs.2/- is collected as Service Tax a....