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TMI Blog2018 (6) TMI 200X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the vehicle only by way of reimbursement of the repair charges - the service tax paid on the bill of the ASS is to be considered as falling within the definition of the input service which is used for providing the output service of the vehicle insurance. The appellant being the service receiver will be entitled to the credit of service tax paid in terms of Rule 2 (l) ibid. Revenue has also raised the issue that the invoices issued by the ASS which is the document based on which the appellant has availed the Cenvat credit, is invariably in favour of the owner of the vehicle and is not in favour of the appellant - Held that:- It is a fact that the insurance claims will be admitted by the appellant only after proper survey and furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng authority confirmed the demand of an amount of ₹ 6,40,12,649/- along with interest and penalties under Sections 76 78 of the Finance Act, 1994. Aggrieved by the impugned order, the present appeal has been filed by the appellant. 2. In this connection we have heard the Ld. Counsel, Shri. N. Venkataraman for the appellant and the Ld. DR, Shri Veerabhadra Reddy, JC for the Revenue. 3. The main arguments advanced on behalf of the appellant are summarized below:- a. In the transactions under this issue there are three players ie., i) Authorized Service Station which has provided the service of repair of the vehicle, ii) the vehicle owner whose vehicle has been repaired and iii) the Insurance Company (the appellant). In certai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that the Tribunal in that case has made distinction between the recipient of service and beneficiary of the service. He submitted that the appellant was, by analogy having the status of the recipient of service in as much as he is obliged by the insurance policy to make payment for the service rendered by the ASS. d. He also argued that in some cases, the invoices issued by the ASS is in the name of the owner of the vehicle but the Commissioner has recorded the fact that the credit availed by the appellant restricted only to the portion reimbursed by them. e. Lastly he also submitted that the SCN issued by the Revenue was hit by limitation. He explained that the assessment for the disputed period was initially made provisional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s never mentioned in such documents. 5. Heard both sides and perused the record. 6.1 The dispute is regarding the admissibility of Cenvat credit availed by the appellant on certain input services. Vehicle owners who have got their vehicles insured by the appellant, approach the ASS for carrying out the repairs. In cases where such repairs are covered by the insurance policies, the appellant pays for such repairs directly to the ASS (cashless settlement) and in other cases reimburses the vehicle owners for such repairs in full or in part. Such payments have been made by the appellant only as part of the settlement of the General Insurance claims for the insured vehicle. 6.2 The stand of the Revenue is that the service tax paid to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax paid on the bill of the ASS is to be considered as falling within the definition of the input service which is used for providing the output service of the vehicle insurance. 6.4 The appellant has relied on the decision of the Tribunal in the Paul Merchants case (supra). We have gone through the said decision in which the Tribunal has made a distinction between the beneficiary of a service and the recipient of the service. The Tribunal observed that the service recipient is the one who is obliged to pay for the services to the service provider and whose need is satisfied by the provision of the service, in other ways it is the buyer of the service . By following the above analogy, we come to the conclusion that the appellant become ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... variably in favour of the owner of the vehicle and is not in favour of the appellant. Hence, Cenvat credit cannot be allowed to the appellants. As discussed above, we have held that the above service is eligible to be considered as an input service for the appellant. In the peculiar facts and circumstances of the case, we appreciate that the invoices will be issued by the ASS only in favour of the vehicle owners who took the vehicle to them for repair. But it is a fact that the insurance claims will be admitted by the appellant only after proper survey and further from the record it is seen that the credit availed by them is restricted to the portion of the repair bill reimbursed by the appellant. There is also nothing on record to suggest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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