2014 (1) TMI 513 - AT - Service Tax

Insurance Auxiliary Service - Service of providing insurance policies - Tax liability discharged by Insurance company - Eligibility to CENVAT Credit - Held that - it is not clear from the sample copies of policy placed before us as to whether the policy was taken in the name of the Applicant or in favour of the beneficiary of the said policies, who, the Applicant claimed to be their members of the club. Regarding the availability of CENVAT Credit, prima facie, we find that the Applicant had not been allowed the CENVAT Credit on the ground the documents on which they had availed credit were not the prescribed ones under Rule 9(1) of the CENVAT Credit Rules, 2004 - Conditional stay granted.

Summary

Issues: Correction of mistakes in ST-5 Application, Service Tax demand challenge, Cenvat Credit mention, Insurance policies service tax liability, Cenvat Credit eligibility, Stay Application hearing.

Correction of Mistakes in ST-5 Application: The appellant filed a Miscellaneous Application seeking rectification of errors in the ST-5 Form, specifically related to the duty liability and Cenvat Credit not being accurately reflected. The advocate highlighted that while the Service Tax demand was shown, the Cenvat Credit was omitted. The Revenue had no objection to correcting these mistakes, leading to the application being allowed for amendments.

Service Tax Demand Challenge: In the grounds of appeal, the entire demand was contested by the appellant. The advocate argued that the insurance policies provided by the appellant were in the name of a club, thus exempting them from paying Service Tax as it was discharged by the insurance company. Sample policy copies were presented to support this claim.

Insurance Policies Service Tax Liability: The Revenue contended that the services provided by the appellant fell under 'Insurance Auxiliary Service' as per the Finance Act, 1994. The appellant was accused of not discharging Service Tax on these services. The Revenue emphasized that the appellant had not availed Cenvat Credit correctly as per Rule 9(1) of Cenvat Credit Rules, 2004.

Cenvat Credit Eligibility: The Tribunal observed that the appellant's services appeared to fall under 'Insurance Auxiliary Service,' and the argument that insurance companies discharged the Service Tax did not absolve the appellant's liability. Concerning Cenvat Credit, it was noted that the appellant had not adhered to the prescribed documents under Rule 9(1) of the Cenvat Credit Rules, 2004.

Stay Application Hearing: The Tribunal directed the appellant to deposit 25% of the Service Tax amount and 10% of the Cenvat Credit within eight weeks to stay the recovery during the appeal's pendency. Failure to comply would lead to the dismissal of the appeal without further notice. The decision aimed to balance the interests of the Revenue, legal principles, and the appellant's financial concerns.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT Kolkata addresses the correction of mistakes in the ST-5 Application, challenges to the Service Tax demand, issues related to insurance policies service tax liability, Cenvat Credit eligibility, and the directives given during the Stay Application hearing.