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TMI Blog2024 (7) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... esaid issue. In this connection, reference was made to the decision of the CESTAT, Chennai in the case of M/S. CHOLAMANDALAM MS GENERAL INSURANCE CO. LTD. VERSUS THE COMMISSIONER OF G.S.T. CENTRAL EXCISE, CHENNAI [ 2021 (3) TMI 24 - CESTAT CHENNAI] , by the learned Senior Counsel for the petitioner. In that case, the assessee entered into agreements with car dealers and Insurance policies have been issued through dealer network. While so, the Credit availed by the Insurance company on the basis of invoices issued by dealers of motor vehicles has been questioned by the Commissioner of GST Central Excise. In the decision of the CESTAT, Mumbai in the case of ICICI LOMBARD GENERAL INSURANCE COMPANY LTD. VERSUS COMMISSIONER OF CGST AND CENTRAL EXCISE, MUMBAI CENTRAL [ 2023 (2) TMI 1093 - CESTAT MUMBAI ], relied on the side of the petitioner, on the basis of the invoices issued by the automotive dealers, service tax was paid by the automotive dealer to the government and the service recipient availed CENVAT credit. However, the Commissioner of CGST and Central Excise, Mumbai not only questioned the availment of CENVAT credit, but also recovered it along with interest and penalty. When th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeals is to be allowed by setting aside the impugned orders as held by Member (Judicial)? (OR) Whether the appeals is to be dismissed by upholding the impugned orders as held by Member (Technical)? BRIEF FACTS: 2.(i) The petitioner is engaged in the business of providing general insurance services relating to Motor Insurance, Health Insurance, Property Insurance, Engineering Insurance, liability insurance and other miscellaneous insurance and it was registered with the Service Tax Department under Registration No.AABCR7106GST001. The petitioner is carrying on such business from 2001 and they also registered themselves with Insurance Regulatory Development Authority of India (IRDAI) to conduct business of general insurance. (ii) According to the petitioner, during the course of their business, they have entered into facilitating agreements with various automobile manufacturers and dealers, who, at the time of sale of automobiles, through their established dealer network, assist the buyers of such automobiles to obtain motor insurance. In that context, the dealers of the automobiles are considered as the first point of contact with the buyers of motor vehicles and also motor i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by them. According to the Department, the availment of such credit is irregular inasmuch as no service, as described in the invoices, has been provided by the dealer to the petitioner. The investigation also unfolded that all the computer generated invoices are not in conformity to Rule 4A of the Service Tax Rules, 1994 inasmuch as the invoices did not bear the signature of the dealer evidencing as to who has issued the invoice. The investigation officials, therefore, concluded that the credit availed on invoices is to be declared as ineligible. (iv) In this context, show cause notice for the period from 2010-2011 to 2014-2015 was issued and ultimately, Order-in-Original dated 23.12.2016 was passed by the Commissioner of Large Taxpayer Unit, Chennai. Subsequently, statement of demand for the period from April 2015 to July 2017 was made and the Order-in-Original dated 28.11.2019 was passed by the Commissioner of GST Central Excise, Chennai South, disallowing the CENVAT Credit and confirming the demands made along with interest. Aggrieved by the said Orders-in-Original dated 23.12.2016 and 28.11.2019, the petitioner has filed appeals in ST Nos.40810/2017 and 40198/2020 before the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rh in Automax vs. CCE Delhi reported in 2018 (363) ELT 1121 (Tri:-Chand) to contend that when there is no dispute qua duty paid, nature of the goods transacted and the actual receipt of the goods in the recipient's factory, then, the credit cannot be denied on the mere ground that the description of goods in the invoice is incorrect. The learned counsel further submitted that in that decision, the Tribunal at Chandigarh concluded that when no investigation was initiated at the hands of the transporter or supplier, then the denial of CENVAT credit at the recipient's end is unlawful. (iii) The learned counsel for the petitioner also contended that the denial of CENVAT credit was on the ground that the invoices issued by TVS Sundaram Motors reflect the existence of two sets of invoices. According to the learned counsel, in the invoices issued to the petitioner, the services are described as data processing and policy servicing services . The invoices at the dealers' end show 'additional incentive'. Only one invoice describing the service as 'data processing and policy servicing services' was issued to the petitioner and they are unaware of a second set main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly licensed brokers are permitted to do insurance business and entitled to receive commission. For the purpose of receiving commission, the dealers of the petitioner have raised invoices describing the services as 'data processing and policy servicing activities', but, in fact, they render no such service. The taxable value and the service tax is calculated as a percentage of own damage (OD) premium and intimated by the petitioner to the dealers through e-mail. These facts have been brought out during the investigation conducted by the department. Before passing the orders, which were impugned before the CESTAT, it was contended that the statement of Sri Venkatachalam Sekar, authorised representative of the petitioner was taken into consideration, who has stated that the petitioner has entered into service provider agreements for 'data processing and policy servicing and related activities services' and the rates for the services have not been specified in the agreements. It was also admitted that the petitioner gives a specific percentage of value of the insurance policy as payout to the dealers. Similar statement obtained during the course of investigation was al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the hands of the petitioner is not justified. However, the Member (Technical) of the Tribunal held against the petitioner by holding that the car manufacturers only facilitate insurance companies to have business through their dealer and apart from this, there is no service provided by them. It was also concluded that in furtherance of the sale of policy, the dealers receive the insurance premium from the customers, take out a print out of the insurance policy to complete the sale and hand it over to the customers and except the same, no other service activity is provided to the petitioner. This conclusion of the Member (Technical) of the Tribunal, according to the learned Senior Counsel for the petitioner, is perverse and arbitrary. The petitioner is a service recipient and they are questioned as to the manner of service provided, on the other hand, the same service rendered by the service provider/dealer has not been subjected to any verification by the department. (iii) The learned Senior counsel for the petitioner further submitted that in the decision of this Court in Modular Auto mentioned supra, reference was made to the decision of State of Karnataka vs. M/s. Ecom Gill Coff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen identical decisions rendered by the Coordinate Benches of the Tribunal have been placed, in order to maintain judicial propriety, the Tribunal ought to have followed them or in the event of the same not being followed, the only option is to place the matter before a larger bench for deciding the matter. In this context, the learned Senior counsel referred to the decisions in Jindal Dye Intermediaries Limited vs. Collector of Customs, Mumbai (2006) (197) E.L.T. 471 (SC) and Jayswals Neco Ltd., vs. CCE, Nagpur (2006( 195) E.L.T. 142 (S.C) wherein it was held that if a Bench does not agree with the view taken by a Coordinate Bench, then, it should refer the matter to a larger bench and refrain from taking a contrary view. The Tribunal, without any valid reasons, rejected the decisions of the coordinate Benches of the Tribunal. With these submissions and case laws, the learned Senior counsel prayed for allowing the writ petitions filed by the petitioner as prayed for. 8. (i) Per contra, Mr. Rajnish Pathiyil, learned Senior Panel Counsel for the respondents submitted that the writ petitions are not maintainable especially when the order of the Tribunal is not final and a decision is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prayed for dismissal of the writ petitions. 9. We have heard the learned Senior counsel for the petitioner and the learned Senior Panel Counsel for the respondents and also perused the record. 10. The present writ petitions are filed mainly on the ground that the conclusion reached by the Member (Technical) to the effect that no service has been provided to the petitioner by the dealers or manufacturers and consequently, the petitioner, as a provider of output service, cannot avail CENVAT input credit on the invoices generated by the dealers, is legally not sustainable. According to the learned Senior Counsel for the petitioner, the very same issue has been considered and decided by the jurisdictional High Court as well as other High Courts in favour of the assessees and hence, the prejudicial portion of the order passed by the Tribunal cannot be sustained and is liable to be set aside. 11. At the outset, it is important to point out that the co-ordinate benches of the Tribunal, in several cases, have dealt with the aforesaid issue. In this connection, reference was made to the decision of the CESTAT, Chennai in the case of M/s. Cholamandalam MS General Insurance Co Ltd vs. The Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the dealers, the Assessee would be eligible for Cenvat Credit. The CESTAT Tribunal, Hyderabad, following the decisions rendered in Modular Auto as well as Cholamandalam-I as well as ICICI Lombard case mentioned supra, held that when the service tax paid at the end of the service provider is not questioned and when there is no doubt that the service tax in question has been paid, the CENVAT Credit taken by the recipient cannot be denied. Further, unless and until the assessment made at the dealer's end is revised or altered, the CENVAT credit availed on the basis of invoices by the recipient's unit cannot be denied or whittled down. 14. Referring to the decisions of the Honourable Supreme Court in Union of India vs. Kamlakshi Finance Corporation Limited reported in 1992 Suppl (1) Supreme Court Cases 443 and in East India Commercial Co. Ltd vs. Collector of Customs, Calcutta reported in 1983 (13) E.L.T. 1342 (SC), the learned Senior counsel for the petitioner submitted that judicial discipline demands that the decision reached by the coordinate benches has to be scrupulously followed by the other Tribunal. However, in this case, the Tribunal has taken a contrary decision an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... djudicated by the coordinate benches and it binds the Tribunal in all respects. While so, the Tribunal cannot go beyond the settled issue and to re-adjudicate the same by referring the dispute to a third member. Judicial discipline requires that the orders of the coordinate bench or the jurisdictional High Court have to be followed without in any manner attempting to factually re-examine or re-adjudicating the same issue. 16. At this juncture, it would be appropriate to refer to the decision of Hon'ble Supreme Court in the case of Official Liquidator v. Dayanand and others, reported in (2009) 1 SCC (L S) 943, in which, the aspect of judicial discipline has been discussed in detail. Paragraphs 75 to 92 of the said judgment are relevant and the same are extracted as under: 75. By virtue of Article 141 of the Constitution, the judgment of the Constitution Bench in Secretary, State of Karnataka vs. Uma Devi (2006 SCC (L S) 753) is binding on all the courts including this Court till the same is overruled by a larger Bench. The ratio of the Constitution Bench judgment has been followed by different two-Judges Benches for declining to entertain the claim of regularization of service m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ani [2004 (8) SCC 579] and observed: 16. We are constrained to refer to the above decisions and principles contained therein because we find that often Umadevi (3) case is being applied by courts mechanically as if it were a Euclid's formula without seeing the facts of a particular case. As observed by this Court in Bhavnagar University and Bharat Petroleum Corpn. Ltd. a little difference in facts or even one additional fact may make a lot of difference in the precedential value of a decision. Hence, in our opinion, Umadevi (3) case cannot be applied mechanically without seeing the facts of a particular case, as a little difference in facts can make Umadevi (3) case inapplicable to the facts of that case. 18. We may further point out that a seven- Judge Bench decision of this Court in Maneka Gandhi vs. Union of India has held that reasonableness and non-arbitrariness is part of Article 14 of the Constitution. It follows that the Government must act in a reasonable and nonarbitrary manner otherwise Article 14 of the Constitution would be violated. Maneka Gandhi case is a decision of a seven-Judge Bench, whereas Umadevi (3) case is a decision of a five-Judge Bench of this Court. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges of coordinate jurisdiction in a High Court start overruling one another's decisions. If one Division Bench of a High Court is unable to distinguish a previous decision of another Division Bench, and holding the view that the earlier decision is wrong, itself gives effect to that view the result would be utter confusion. The position would be equally bad where a Judge sitting singly in the High Court is of opinion that the previous decision of another Single Judge on a question of law is wrong and gives effect to that view instead of referring the matter to a larger Bench. In such a case lawyers would not know how to advise their clients and all courts subordinate to the High Court would find themselves in an embarrassing position of having to choose between dissentient judgments of their own High Court. [Emphasis added] 79. In Lala Shri Bhagwan vs. Ram Chandra [AIR 1965 SC 1767], Gajendragadkar, C.J. Observed: 18. ... It is hardly necessary to emphasize that considerations of judicial propriety and decorum require that if a learned Single Judge hearing a matter is inclined to take the view that the earlier decisions of the High Court, whether of a Division Bench or of a Sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al case it would have been proper, to maintain judicial discipline, to refer the matter to a larger Bench rather than to take a different view. We note it with regret and distress that the said course was not followed. It is well-settled that if a Bench of coordinate jurisdiction disagrees with another Bench of coordinate jurisdiction whether on the basis of different arguments or otherwise, on a question of law, it is appropriate that the matter be referred to a larger Bench for resolution of the issue rather than to leave two conflicting judgments to operate, creating confusion. It is not proper to sacrifice certainty of law. Judicial decorum, no less than legal propriety forms the basis of judicial procedure and it must be respected at all costs. 83. In Pradip Chandra Parija and others vs. Pramod Chandra Patnaik and others [2002 (1) SCC 1], the Constitution Bench noted that the two learned Judges denuded the correctness of an earlier Constitution Bench judgment in Bharat Petroleum Corpn. Ltd. vs. Mumbai Shramik Sangha [2001 (4) SCC 448] and reiterated the same despite the fact that the second Constitution Bench refused to reconsider the earlier verdict and observed: 3. We may po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces can it be followed, the proper course for it to adopt is to refer the matter before it to a Bench of three learned Judges setting out, as has been done here, the reasons why it could not agree with the earlier judgment. If, then, the Bench of three learned Judges also comes to the conclusion that the earlier judgment of a Bench of three learned Judges is incorrect, reference to a Bench of five learned Judges is justified. [Emphasis supplied] 84. In State of Bihar vs. Kalika Kuer and others [2003 (5) SCC 448], the Court elaborately considered the principle of per incuriam and held that the earlier judgment by a larger Bench cannot be ignored by invoking the principle of per incuriam and the only course open to the coordinate or smaller Bench is to make a request for reference to the larger Bench. 85. In State of Punjab vs. Devans Modern Breweries Ltd. [2004 (11) SCC 26], the Court reiterated that if a coordinate Bench does not agree with the principles of law enunciated by another Bench, the matter has to be referred to a larger Bench. 86. In Central Board of Dawoodi Bohra Community vs. State of Maharashtra [2005 (2) SCC 673], the Constitution Bench interpreted Article 141, refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice of the Bench, it is to be respected and is binding, subject of course, to the right to take a different view or to doubt the correctness of the decision and the permissible course then open is to refer the question or the case to a larger Bench. This is the minimum discipline and decorum to be maintained by judicial fraternity. 89. It is interesting to note that in Coir Board, Ernakulam vs. Indira Devi P.S. [1998 (3) SCC 259], a two- Judges Bench doubted the correctness of the seven-Judges Bench judgment in Bangalore Water Supply Sewerage Board vs. A.Rajappa [1978 (2) SCC 213] and directed the matter to be placed before Hon'ble the Chief Justice of India for constituting a larger Bench. However, a three-Judges Bench headed by Dr. A.S. Anand, C.J., refused to entertain the reference and observed that the two-Judges Bench is bound by the judgment of the larger Bench Coir Board, Ernakulam, Kerala State vs. Indira Devai P.S. [2000 (1) SCC 224]. 90. We are distressed to note that despite several pronouncements on the subject, there is substantial increase in the number of cases involving violation of the basics of judicial discipline. The learned Single Judges and Benches o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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