31 taxmann.com 168 (Ahmedabad - CESTAT)
CESTAT, AHMEDABAD BENCH
Commissioner of Service Tax, Ahmedabad v. Landmark Automobiles (P.) Ltd.
Section 65(105)(zl) of the Finance Act, 1994, read with rule 2(1)(d) of the Service Tax Rules, 1994 - Insurance Auxiliary Services - Assessee, an insurance agent, received commission from general insurance company - Department demanded service tax thereon - Assessee argued that his services were covered under reverse charge under rule 2(1)(d)(ii) and insurance company was person liable to pay service tax - Department asked assessee to furnish certificate of discharge of service tax liability from general insurance company -
HELD : Defence put up by assessee was correct inasmuch as rule 2(1)(d)(ii) clearly casts responsibility on general insurance company to discharge service tax liability on commission paid by them to their agent - Said defence is enough for assessee to state that amount received by them has already been taxed by Government in hands of insurance company - Hence, department's appeal was liable to be dismissed [Paras 4 & 5] [In favour of assessee]
1. This appeal is filed by the Revenue against order in appeal No. 116/2011 (STC)/K. ANPAZHAKAN/Commr.(A)/Ahd, dt.24-05.201l vide which the first appellate authority has set aside the demands of service tax liability with interest and penalties imposed by the adjudicating authority on the respondent.
2. Heard both sides and perused the records.
3. The issue involved in this case is regarding the discharge of service tax on the ground of commission received by the respondent from M/s. IFFCO-TOKIO General Insurance Company Lid. The said commission has been given by M/s. IFFCO-TOK1O General Insurance Company Ltd. to the respondent as a licensed agent. The first appellate authority has held that as per the provisions of rule 2(l)(d)(ii) of the Service Tax Rules, 1994 the respondent need not discharge the service tax liability and discharging of the service tax liability is casted on the insurance company. The first appellate authority has relied upon the certificate given by M/s. IFFCO-TOKIO General Insurance Company Ltd. to that effect. In the grounds of appeal, Revenue has said that the certificate which has been produced by the respondent before the first appellate authority does not clarify the period to which service tax has been claimed to have been paid by the M/s. IFFCO-TOKIO General Insurance Company Ltd., and the first appellate authority has not verified the payment particulars made by the insurance company corresponding/relating to certificate in question and hence the order in appeal is bad in law and needs to be set aside.
4. After considering the submissions made at length by both sides and perusal of the records, I find that there is no dispute to the fact that the respondent M/s. Landmark Automobiles Pvt. Ltd. is licensed agent of M/s. IFFCO-TOKIO General Insurance Company Ltd. It is also undisputed that the demand of the service tax is raised on the commission received by them as a licensed agent from the said M/s. IFFCO-TOKIO General Insurance Company Ltd. I find that the defence put up by the respondent before the: lower authorities is correct inasmuch as the provisions of rule 2(1)(d)(ii) of the Service Tax Rules, 1994 clearly casts responsibility on the: insurance company to discharge the service tax liability on the commission paid by them to their licensed agent. In the current case, that defence is enough for the respondent herein to state that the amount received by them from M/s. IFFCO-TOKIO General Insurance Company Ltd. has already been taxed by the government in the hands of the insurance company. I find that the first appellate authority was correct in allowing the appeal filed by the respondent.
5. In my considered view, the impugned order is correct, legal and does not suffer from any infirmity. The impugned order is upheld and the appeal is rejected.