2024 (3) TMI 1175 - AT - Service Tax

Classification of service - insurance service or not - general insurance scheme related to P I Clubs which is only a membership fee paid to the club for third party insurance - HELD THAT - Since both the counsel agree for remanding the matter back to the file of the original authority for denovo adjudication, it is deemed appropriate to set aside the impugned order and restore the matter back to the file of the original authority who shall pass a denovo adjudication order in the light of the judgment of the Hon'ble Supreme Court in STATE OF WEST BENGAL ORS. VERSUS CALCUTTA CLUB LIMITED AND CHIEF COMMISSIONER OF CENTRAL EXCISE AND SERVICE ORS. VERSUS M/S. RANCHI CLUB LTD. 2019 (10) TMI 160 - SUPREME COURT . The appeal is allowed by way of remand.

Summary

Issues involved: Appeal against Order in Original regarding service tax on services provided by Protection & Indemnity Clubs (P&I Clubs) located outside India.

Summary:
The appellant availed services from P&I Clubs outside India for third party liabilities but did not pay Service Tax u/s 66A of the Finance Act, 1994. After a Statement of Demand was issued, the Commissioner confirmed the demand of service tax, interest, and penalties. The appellant contended that the membership fee paid to the club for third party insurance is not taxable, citing a judgment of the Hon'ble High Court of Gujarat. The original authority held that the payment made by the appellant was rightly classifiable under general insurance service, not covered by mutuality. The appellant argued that the services provided by P&I Clubs are unique and not insurance services, referencing a later decision of the Hon'ble Supreme Court. Both parties agreed for remanding the matter for denovo adjudication in light of the Supreme Court judgment, leading to the appeal being allowed by way of remand.

The appellant's contention regarding the non-taxability of services provided by the club due to lack of duality and mutuality was not accepted by the original authority. The appellant sought a denovo adjudication considering a later decision of the Hon'ble Supreme Court, supported by a High Court order setting aside an assessment. The matter was remanded for reconsideration in light of the Supreme Court judgment, with all issues and contentions left open.