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TMI Blog2024 (3) TMI 1281X X X X Extracts X X X X X X X X Extracts X X X X ..... Karnataka Government Servant s (Compulsory Life Insurance) Rules, 1958 under the welfare scheme applicable to all Government employees irrespective of their status, collected contribution of 6.5% of mean pay as monthly premium towards the policy. The Service Tax Department proposed to levy service tax on the premium so collected by the appellant. On the said issue, this Tribunal in appellant own case, considering the Circular dt. 18/12/2006 issued by the Board, held that the amount of premium collected in rendering life insurance service is in the nature of sovereign function and not leviable to service tax - there are no reason not to follow the aforesaid finding of the Tribunal as no contrary decisions have been placed by the Revenue. Lev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dt. 21/01/2014 2009-10 Rs.54,62,436/- Rs.7661/- u/s 75 u/s 77(2) u/s 78 ST/20084/2015 OIO No.14/2014-15 dt. 02/09/2014 2006-07 to 2009-10 Rs.4,66,84,019/- Rs.2,56,47,134/- Rs.28,743/- u/s 75 Rs.200/- per day during failure to pay tax. u/s 76 u/s 77(2) u/s 78 2. Briefly stated the facts of the case are that the appellant, a department of Karnataka Government provided life insurance service as defined under Section 65(49) of the Finance Act, 1994 to their employees during the relevant period i.e. October 2005 to March 2008 and April 2009 to March 2010. Alleging that the appellant had provided taxable service under the category of life insurance service and renting of immovable property service but failed to discharge appropriate service tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e . 3.2. As far as levy of service tax on life insurance service provided by the appellant, a department of the Karnataka State Government, it is submitted that the said service squarely falls under the category of discharging of sovereign functions under Karnataka Government Servant s (Compulsory Life Insurance) Rules, 1958. Considering the service rendered by the appellant in furtherance of sovereign functions, this Tribunal in their own case for the earlier period referring to Board s Circular, allowed their appeal by setting aside the demand on the life insurance service rendered to their employees. 4. Learned AR for the Revenue reiterated the findings of the learned Commissioner. He has submitted that Hon ble Supreme Court recently in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a mandatory and statutory function. We find that Hon ble High Court of Kerala while disposing the Writ Petition No. 15892/2008 observed, in respect of Kerala Govt. activity in similar manner, that the activity being perused by the petitioner in providing life insurance coverage to the employees of the State Govt. is part of its statutory obligations. We also find that CBEC vide Circular No. 89/7/2006-ST dated 18.12.2006 (issued from F.No. 255/1/2006- CX-4) held at Para 2 that: the issue has been examined. The Board is of the view that the activities performed by the sovereign/public authorities under the provision of law are in the nature of statutory obligations which are to be fulfilled in accordance with law. The fee collected by them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax on Renting of Immovable Property Service during the period in question and conflicting opinions on the subject expressed, levy of penalty for non-payment of service tax on the said service cannot be sustained. 9. In the result, the demands relating to service tax on life insurance service provided to the employees are hereby dropped and service tax on renting of immovable property in both the appeals are confirmed with interest. However, penalties imposed for failure to discharge service tax on renting of immovable property are hereby dropped. The impugned orders are modified to the extent mentioned above. Appeals are disposed of accordingly. ( Operative portion of the order was pronounced on conclusion of hearing ) - - Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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