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TMI Blog2018 (6) TMI 1006X X X X Extracts X X X X X X X X Extracts X X X X ..... 17th March 2012 and, according to him, the receipt of payment is sufficient to determine the point of taxation. There is no doubt that applicant makes a payment along with proposal whether that first premium is encashed immediately, or otherwise, it is placed at the disposal of the appellant and is, indisputably, consideration for the admitted service - In the present dispute the appellant has admittedly paid duty according to their own interpretation of the point at which the tax liability arises. The claim of the appellant is that the service commences with the acceptance of the proposal. While that may be so, the tax liability is required to be computed from the moment the consideration is received even if the contract of insurance s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing all tax liabilities and, that too, on time. Consequently, according to him, the liability to penalty under section 78 of Finance Act, 1994 would also not arise. According to Learned Authorized Representative, the impugned order involves determination of tax liability which also must be subject to proceedings here. 3. As the perspective offered on behalf of the appellants were at variance and the tax ordered for recovery and appropriation in the impugned order is substantial, we consider it appropriate to examine the scope of the dispute first. 4. We take note that appellant had obtained registration as provider of a service that was taxable under section 65 (105) (zx) of Finance Act, 1994 and had been discharging tax liability on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding to him, the mechanics adopted by the appellant had not been known to the department which was tantamount to suppression. In view of our finding that section 78 can be invoked only in relation to non-payment of taxes or short payment of taxes under section 73 of Finance Act, 1994 as on the date of issue of show-cause notice, these decisions do not advance the cause of Revenue on this issue. 6. A dispute on the point of taxation has been camouflaged by the adjudicating authority as evasion of taxes that stood discharged in due compliance of the law imposing the tax and of the law governing the determination of assessable value. The outcome of the dispute will merely resolve whether the tax was paid on time or was delayed with consequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppear to have occurred and all receipts with proposals have been duly absorbed as premium income of the appellant. Hence, the only issue for determination is the point at which liability to tax arises and on that will hinge the promptitude that can escape consequential interest. 9. According to Learned Chartered Accountant, the appellant is an insurer rendering such service that would commence only with acceptance of the proposal for insurance leading to acknowledgement of first premium as the first of the income stream for rendering of the service. 10. Learned Authorized Representative contends that the description in section 65 (105) of Finance Act covers not only services provided but also those agreed to be provided in future and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity has taken note of rule 3 and rule 6 of Point of Taxation Rules, 2011 as originally notified and prior to amendment of 17 th March 2012 and, according to him, the receipt of payment is sufficient to determine the point of taxation. We have perused the statement which has been extracted in the show-cause notice as well as in the impugned order and take note that the average turnover time can vary from three to twelve days between the receipt of the proposal and the issue of the policy. It is only at that stage that the acceptance of the contract occurs and policy is issued. Prior to the notification of Point of Taxation Rules, 2011, tax liability crystallized on the receipt of consideration. 13. There is no doubt that applicant makes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided in future. When payments relatable to taxable services are received during the course of provision of service, service tax is liable to be paid to the extent of receipt of payment. In other words, a person is liable to pay the tax as soon as the consideration towards the taxable services is received. 14. He also placed reliance on the decision of the Hon'ble High Court of Delhi in Kwality Ice-cream Company Anr. v. Union of India Ors. [2012-TIOL-252-HC-DEL-CX] t o submit that the curbs of limitation imposed on recovery of duty extends to interest to. The facts, as mapped out in the judgment of the Hon'ble High Court, differs substantially from the present dispute; in that matter the issue for consideration was the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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