2015 (12) TMI 604 - AT - Service Tax

Waiver of pre deposit - Reimbursement of charges for insurance service - Held that - It is the findings of the authority that the charges which have been received by the appellant for foreclosure charges, surrender charges and policy reinstatement charges are in respect of the services i.e. insurance services. The adjudicating authority has relied upon the judgement of the Tribunal in the case of Housing & Development Corporation (HUDCO) - 2011 (11) TMI 95 - CESTAT, AHMEDABAD which was doubted by the same Bench of the Tribunal in the case of small Industries Development Bank of India vs. Commissioner of Service Tax, Ahmedabad - 2014 (12) TMI 668 - CESTAT AHMEDABAD as a contrary view was produced before the Bench. By an order dated 13.11.2014 the Division Bench referred the matter to the Larger Bench and we were informed that the matter is still pending for disposal by the Larger Bench. - issue involved in the case in hand is similar to the issue as referred to the Larger Bench, Court followed the same - Stay granted.

Summary

Issues: Stay petition for waiver of pre-deposit of confirmed amount under Section 65(105) (zzzzf) of the Finance Act, 1994 for charges related to insurance services.

Analysis:
The judgment by the Appellate Tribunal CESTAT MUMBAI addressed a stay petition seeking a waiver of pre-deposit of the amount confirmed by the adjudicating authority, along with interest and penalties imposed, concerning charges received by the appellant for foreclosure, surrender, and policy reinstatement under Section 65(105) (zzzzf) of the Finance Act, 1994. The adjudicating authority concluded that these charges fall under insurance services. The authority relied on a previous Tribunal judgment in the Housing & Development Corporation (HUDCO) case, which was later doubted by the same Bench in the case of Small Industries Development Bank of India vs. Commissioner of Service Tax, Ahmedabad. Due to the matter being referred to the Larger Bench and pending disposal, the Appellate Tribunal decided to allow the application for waiver of pre-deposit and stay recovery until the appeal's final disposal, following convention and the similarity of the issues involved.

This judgment highlights the importance of consistency in judicial decisions and the impact of conflicting views on the interpretation of legal provisions. The Tribunal's decision to grant a stay on recovery pending the resolution of the appeal demonstrates a cautious approach to prevent undue financial burden on the appellant during the legal process. The reliance on precedent cases and the referral to the Larger Bench indicate the complexity and significance of the legal issues involved in determining the applicability of charges to specific services under the Finance Act, 1994. Overall, the judgment reflects a balanced consideration of legal principles, procedural fairness, and the need for clarity in interpreting statutory provisions related to taxation and service charges in the insurance sector.