Customs, Excise and Gold Tribunal - Bangalore
Karnataka Govt. Insurance Department vs C.C.E. on 31 July, 2007
Equivalent citations: 2008[9]S.T.R.355, [2008]13STT135, (2008)14VST312(CESTAT-BLORE)
ORDER S.L. Peeran, Member (J)
1. The appellant is challenging the Order-in-Appeal No. 647/2002 dated 24-10-2002 levying service tax with regard to the activity of Motor Insurance carried out by the appellants. The appellants have failed to register themselves under the Finance Act, 1994 for payment of service tax on the activity of Motor Insurance carried out by them as brought out under the category of "General Insurance Business" as defined under Section 65 of the Finance Act. The matter had come up on board a number of occasions and the appellant's Advocate has been taking adjournments. The matter has been listed for final hearing from the year 2005 onwards. Despite several opportunities given to the appellants and their Counsel, they did not appear to argue the matter.
2. We find that the matter has been adjourned for 18 times. On each occasion the appellant was represented by their representative Shri H.M. Manjunatha or one of the Govt. Advocates for the appellants. The matter was adjourned with observation that it should be heard finally. Despite several opportunities given to the appellants, they have not availed the same. However they filed written arguments for which counter has also been filed by Revenue. The contention in the written submission has been gone into great detail by us. Their contention is that they were carrying on General Insurance Business, i.e., Motor Vehicle Insurance as per exemption granted under Section 36 of General Insurance Business (Nationalization) Act, 1972. They contended that they are not required to pay service tax. They also contended that the authority did not have jurisdiction to proceed to recover the amount. They also challenged the invocation of larger period.
3. The learned DR submits that reference made to the General Insurance Business (Nationalization) Act, 1972 is not applicable to the service tax matter. He submits that the said exemption pertains to only Insurance Service and does not pertain to the Motor Vehicle Insurance with regard to coverage to the Government vehicle. Under the said provisions, Karnataka General Insurance Department has been granted permission to insure the Govt, vehicles and exemption has been granted under Motor Vehicles Act. There is no exemption granted on payment of service tax and therefore the Department has got jurisdiction to levy the service tax. The learned DR submits that the appellants did not seek clarification from the Government nor pay the service tax in time. Therefore the invocation of larger period is applicable in terms of Section 73 of Finance Act, 1994. He also submits that they did not declare details under Section 73 of the Finance Act and therefore invocation of larger period is applicable.
4. We have carefully considered the submissions made by the appellants in the written submission. We have also gone through the counter filed by the Revenue. In the first place, we notice that despite granting 18 adjournments to the appellants, they have on one pretext or the other, not been pursuing the matter though the appellants had engaged Govt. Advocate. We have considered the written submission. They have not produced any specific Circular or Notification issued by the Central Govt., granting them exemption from the service tax. The reference made by the appellants for exemption under Section 36 of the General Insurance Business (Nationalization) Act is not applicable for levy of service tax under the Finance Act, 1994. The appellants ought to have obtained clarification from the Central Government or they should have approached the Central Government for granting exemption under the Act. The appellants have not done the same. They have also not declared the details under Section 73 of the Finance Act, 1994. Therefore the plea raised by the appellants on time-bar is rejected. The appellants should pay the service tax. From the Order-in-Original, we find that the Additional Commissioner has not imposed any penalty in view of the appellant being a State Government Department. The Revenue has also not filed any appeal on this point. Therefore we do not find any infirmity in the impugned order. The appeal is rejected.
(Pronounced and dictated in the open Court)