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TMI Blog2018 (12) TMI 1537X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent, i.e. M/s. Reliance Nippon Life Insurance Co. Ltd. (RNLICL) in show cause notice dated 24.04.2014. 2. The remuneration paid to channel partners as brokerage, commission, etc., was admitted to being liable to tax under section 65(105)(zy) of Finance Act, 1994 and tax was being paid by respondent as 'person liable to pay tax' in terms of rule 2(1)(D)(iii) of Service Tax Rules, 1994. However, the commission paid to the 'Lead generators' was excluded from the assessable value determined by the respondent and the notice demanded recovery of Rs. 28,17,70,415/- paid to these allegedly unlicensed 'insurance agents' for the period from October 2008 to March 2011 under section 73(1) of Finance Act, 1994, along with interest thereon, and propo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies, sourced through unofficial agents, and, to the extent that such policies are regularized, the sourcing of these policies cannot be attributed to persons outside the definition of agent under the Insurance Act, 1938. Asserting that the expression "Insurance Auxiliary Service", defined in section 65 of the Finance Act, 1994 is broad enough to cover any service provided to a policy holder or insurer, including re-insurer by an actuary or intermediary or insurance intermediary or insurance agent, in relation to insurance auxiliary services concerning life insurance business by an intermediary or insurance and that intermediary is defined in an inclusive, not exhaustive, enumeration, he argued that there is no escapement from tax liability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ispute, but stood amended vide order dated 12.08.2012 of IRDA, which led to discontinuance of resort to such a channel from July 2012. Learned Counsel also submitted that they had paid service tax amounting to Rs. 51,95,73,793/- in cash during the investigation and claimed the beneficial effect of revenue neutrality. He further submitted that mere failure to declare does not suffice to establish willful mis-declaration or willful suppression in the absence of some deliberate act of omission or commission with such intent and that they were under the bonafide belief that service tax is not payable by them on reverse charge since the 'lead generators' are not 'insurance agents'. He further submitted that as per proviso to Section 73(1) the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luding re-insurer by an actuary, or intermediary or insurance intermediary or insurance agent, in relation to insurance auxiliary services concerning life insurance business;' 7. The provider of the service covered by the reverse charge mechanism is 'insurance agent' which, in turn, has been defined along with 'intermediary or insurance intermediary' under section 65(54) and section 65(56) of Finance Act, 1994 to have the meaning assigned under section 2(10) of Insurance Act, 1938 and section 2(1)(j) of Insurance Regulatory and Development Authority Act, 1999. Insurance Act, 1938 is very clear as to the scope of coverage in the definition of 'insurance agent'; such 'insurance agents' are indeed deployed by the respondent in the present di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the insurance company in so far as the policyholder is concerned. This is not to disclaim the scope of coverage of the service provided by 'lead generator' under any other head of taxable service. To the extent that the burden to discharge the tax liability is not specifically transferred to the present respondent as recipient under any other taxable services, the show cause notice would fail as rightly held in the impugned order. 9. The transfer of burden of discharge to the service recipient within section 68 of Finance Act, 1994 is specific and limited without scope for extending beyond the few transactions listed in rule 2(d)(i) of Service Tax Rules, 1994. The Central Board of Excise and Customs, vide instruction no. 137/21/2011-ST ..... X X X X Extracts X X X X X X X X Extracts X X X X
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