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TMI Blog2018 (4) TMI 1182X X X X Extracts X X X X X X X X Extracts X X X X ..... the service tax - demand of duty with interest upheld. It is clear that they have failed to pay the service tax on the bonafide belief that the activity did not fall under Business Support Service. Taking this into consideration, the penalty imposed under section 76 is unwarranted - penalty u/s 77 upheld. Demand of duty with interest upheld - penalty u/s 77 upheld - penalty u/s 76 set aside - appeal allowed in part. - ST/361/2010 - Final Order No. 40360/2018 - Dated:- 8-2-2018 - Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri N. Quadir Hoseyn, Advocate for the Appellant Shri R. Subramaniam, AC (AR) for the Respondent Per Bench Brief facts are that the appellants w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relevant period. Being a corporate agent for the insurance companies, the activities are covered under Insurance Auxiliary Service of section 65(55) of the Finance Act, 1994. Under such category of services, service provider is liable to pay service tax except in the case of insurance agent. Under rule 2(1)(d)(iii), the person liable for paying tax in relation to insurance auxiliary services rendered by insurance agents is any person carrying on general insurance and life insurance business in India . Again, Rule 6 of Service Tax (Determination of Value) Rules, 2006 speaks that the value of taxable service shall also include the commission, fee or any other sum, by whatever name called, paid to such agent by the insurer appointing such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. counsel is that the appellant is appointed as a corporate agent for the insurance companies and that any activity relating to insurance business would come within the insurance auxiliary service. The charges reimbursed by the insurance companies for the infrastructural facilities do not fall within the meaning of Business Auxiliary Service or Business Support Service. The definition of Business Support Service as it stood during the relevant period is reproduced as under: - Support Services of Business or Commerce means services provided in relation to business or commerce and includes evaluation of prospective customers, telemarketing, processing of purchase orders and fulfilment services, information and tracking of delivery sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not fall under Business Support Service and would fall within the Insurance Auxiliary Service; that therefore it is the insurance companies that have to pay the service tax. Indeed they have been carrying this plea upto the stage of the Tribunal and it is clear that they have failed to pay the service tax on the bonafide belief that the activity did not fall under Business Support Service. Taking this into consideration, we are of the opinion that the penalty imposed under section 76 is unwarranted. The same is set aside without disturbing the penalty under section 77 of the Finance Act, 1994. 8. In the result, the impugned order is modified to the extent of setting aside the penalty imposed under section 76 only without disturbing the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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