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TMI Blog2014 (2) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... d for a denovo consideration by adjudicating authority was felt. Therefore, after waiving the requirement of pre-deposit, appeal itself was taken up for hearing. 2. The appellant is providing General Insurance Service . They provide such insurance service directly to their clients and also through intermediaries i.e., through insurance agents like Banks, NBFCs, Motor Vehicle Dealers, Garage Owners etc. 3. While selling insurance policies, Regulations laid down by the IRDA requires that for a prescribed period after receipt of the policy document by the insured, the insured should be given the right of refusing the policy. The appellants claim that in cases of such refusal, the appellants refund the insurance premiums along with the service tax collected to the persons from whom such amounts are collected. Since such cancelled policies involve payment of service tax for services not provided the appellants adjust the excess payment made during one month for such cancelled policies, for paying service tax liability in subsequent months as per Rule 6 (3) of Service Tax Rules, 1994. The core dispute in this proceeding is whether such adjustments made during the period 01-10-2007 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner in the absence of transaction-wise details of service tax amount paid and amounts refunded, which have been produced before the Tribunal today. These are required to be gone into to satisfy that the credits have been actually made in respect of the clients who were required to be refunded the insurance premiums as well as service tax on the same. The adjudicating Commissioner has also taken objection to the fact that the refunds have been made by way of credit and not by issue of cheques. In this respect, we note that a large number of transactions are involved and the industry practice is to make refunds by way of book adjustment allowing credit as stated by the Ld. Advocate (which is subject to verification). Hence, the department cannot insist that in every case the refund may be made in particular manner i.e., by cash or by issue of cheque. The whole rationale behind Rule 6 (3) is that where the service tax has been paid on amounts received for providing particular service and that service for some reason has not been provided by an assessee, he can make adjustment of the excess tax paid in the succeeding period. That rationale would be defeated if the condition of ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al in the earlier order under cover of their letters dated 26.2.12, 6.5.13, 17.5.13 and 29.5.13. Contents of these letters are reproduced below leaving out submissions regarding SCNs not covered in the present proceeding and also leaving out submissions regarding refunds directly to customers:- A. Letter Dt. 06.05.2013 Refund of Premium along with Service Tax under Rule 6(3) of Service Tax Rules-further submission of documents: This is further to our various submissions and the subsequent discussion/meeting we had with Commissioner of Service Tax, LTU, Chennai, on 26-April-2013 with regard to the refund of premium and service tax made to the insured/intermediary. 1. SCN No. LTUC/232/2009-C dated 17.08.2009 -October 2007 to Sep. 2008. In respect of refunds made by way of transfer to intermediary accounts, please find enclosed statement giving details of policy-wise refunds made during October, 2007 to September, 2008. 2. SCN No. LTUC/16/2011-C dated 06.01.2011 April 2009 to September 2009. With regard to refunds by way of credit to intermediary, please find attached statement giving details of refunds made during April 2009 to September 2009. 3. SCN No. LTUC/194/2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnishing the list of transactions, your office would be picking the transactions for which we need to carry out confirmation from the end customers. It is towards this only, we requested you to get the list of transactions. As you are aware, for one of the disputed period, we have already circulated the confirmation request, we request you to furnish the transactions list immediately for the remaining two periods, to take up the verification. We would like to know whether your request is for bank statements towards intermediary transactions . We wish to mention that all along our understanding with regard to the intermediary transactions are getting the confirmation from the end customers, and not bank statement extracts. In case you wish, the same will be filed on hearing from you. Details of intermediary transactions culled out and submitted to Tribunal- Clarifications. Quoting the CESTAT s Final Order dated 13.06.2012, you have mentioned the following: However in respect of both impugned periods involved in these two cases, such details were not culled out and provided at the time of adjudication. He further states that these details have been filed with Tribunal but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant should be easy to extract. What Revenue wants to verify is whether in such case the refund had reached the insured. It would appear that the direction of the Tribunal that both sides should co-operate in the matter has not been taken note of by either side. 12. The Ld. Advocate had pointed out one apparent error in para 12.6 where it is stated that the appellant was taking the insurance premium along with service tax directly from the end customer even in cases where the business was done through the intermediary. He denies this statement. Further he points out that this statement is inconsistent with para 12.1 of the impugned order. 13. The Ld. Advocate submits that the scope of the original demand and the show cause notice is only to verify whether the refund has been credited to the account of the intermediary and he argues that requirement as per Rule 6(3) is met when money is credited to the account of intermediary. 14. The argument of the Ld. AR is that it would appear that in the normal course the appellant was not refunding the service tax amount to the insured but only when the insured asks for such money, it was refunded. He submits that the appellant is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue does not seem to be deliberated upon and decided by the Tribunal in order dated 26-06-12. The appellant has not given categorical statement that refunds have reached the insured in all cases and they have apparently not provided data to prove refunds have reached the insured though there is a claim that in most cases refunds have reached the insured. Revenue has not brought out any specific instances to prove that refunds have not reached the insured. We are sending this case for denovo adjudication so that the dispute gets resolved firstly on facts? Whether the refunds reached only the intermediaries and not the insured. Since Appellant has a case that refund has reached the insured in most cases they should be given an opportunity to demonstrate the same. We understand the data involved is huge and verification may be possible only on test basis. Appellant seems to have made offer for demonstrating such refunds on a test basis which was not taken up by the adjudicating authority. The Commissioner has not disclosed this report of the Assistant Commissioner to the appellant and heard their submissions on the report before relying on it. The Commissioner does not appear to have h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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