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2024 (5) TMI 69 - AT - Service TaxCENVAT Credit - Credit availed on the basis of bogus invoices issued by Automobile dealers - whether assessment to tax at the hands of the service providers end can be questioned at the hands of service receiver? - HELD THAT - On going through the case record and perusing the order passed by this Tribunal in respect of the Appellant for the first showcause notice since this notice is based on statement of demand issued in pursuance to the said show-cause notice. As could be noticed, this Tribunal has taken note of those statement of employees of motor vehicle dealers as discussed in another case namely M/S. CHOLAMANDALAM MS GENERAL INSURANCE CO. LTD. VERSUS THE COMMISSIONER OF G.S.T. CENTRAL EXCISE, CHENNAI 2021 (3) TMI 24 - CESTAT CHENNAI , while passing the order and it had relied upon the judgements passed by this Tribunal in Modular Auto Ltd. Vs. CCE 2018 (8) TMI 1691 - MADRAS HIGH COURT and given the findings that assessment to tax at the hands of the service providers end can t be questioned at the hands of service receiver (Appellant in this case). The order passed by the Commissioner of Central GST, Audit-I, Pune is hereby set aside - appeal allowed.
Issues involved: Confirmation of Service Tax demand based on alleged ineligible credits.
Summary: 1. The Appellant, a provider of General Insurance services, challenged the Service Tax demand of &8377;31,99,84,269/- imposed by the Commissioner of Central GST, Audit-I, Pune. The demand was based on the Appellant allegedly availing ineligible credits, along with interest and penalties under various Sections of the Finance Act. 2. The investigation revealed that the Appellant was availing CENVAT Credit based on bogus invoices issued by Automobile dealers. The Appellant, after going through the adjudication process and receiving no relief from the Commissioner, approached the Tribunal. The Appellant argued that the payments made to motor car dealers were for providing infrastructural facilities for its motor insurance business, classified as 'Business Auxiliary Service'. 3. The Appellant contended that the demand was raised without sufficient proof, despite the classification of service not being disputed by the Department at the dealers' end. The Appellant referenced various decisions by the Tribunal in similar cases to support their argument. The demand was based on a 'statement of demand' for a specific period, which had been previously addressed and relieved by the Tribunal in the Appellant's favor. 4. The Authorised Representative for the Respondent-Department supported the Commissioner's order, citing employees' admissions regarding the nature of payments made to dealers as insurance commission. The Representative argued that the payments were not payable to unregistered Agents as per IRDA rules. 5. The Tribunal, after reviewing the case record and previous orders, found merit in the Appellant's arguments. Relying on past judgments and consistent findings, the Tribunal allowed the appeal and set aside the order passed by the Commissioner, providing consequential relief to the Appellant. Conclusion: The appeal was allowed, and the order passed by the Commissioner of Central GST, Audit-I, Pune was set aside with any consequential relief.
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