Custom, Excise & Service Tax Tribunal
Cholamandalam Ms General Insurance ... vs Commissioner Of Central ... on 13 September, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
Appeal No. ST/606/2012
[Arising out of Order-in-Appeal No.40/2012 dt. 23.8.2012 passed by the Commissioner of Central Excise & Service Tax, LTU (Appeals), Chennai]
For approval and signature:
Honble Shri MATHEW JOHN, Technical Member
1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? :
2. Whether it should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? :
3. Whether the Member wishes to see the fair copy of
the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
Cholamandalam MS general Insurance Company Ltd.
Appellant
Versus
Commissioner of Central Excise(ST),LTU
Chennai
Respondent
Appearance:
Shri V.S.PRabhu, Asst. General Manager
For the Appellant
Shri K.P.Muralidharan, Supdt. (AR)
For the Respondent
CORAM:
Honble Shri Mathew John, Technical Member
Date of hearing : 13-09-2013
Date of decision : 13-09-2013
FINAL ORDER No. 40365/2013
1. The appellant is in the business of providing insurance services. Certain information stated to be received by Revenue from M/s. Punjab Alkalies & Chemicals Ltd., Nayanangal revealed that appellant had received an amount of Rs.4,71,331/- during the period 2005-06 to 2008-09 (upto June 2008) from M/s. Punjab Alkalies & Chemicals Ltd (PACL for short). Revenue was of the view that appellant had not paid service tax in respect of such receipt. The show cause notice does not specify the evidence which is relied upon to prove such receipt and to prove that such receipt was consideration for any taxable service. Initially, show cause notice suggested that the appellant was providing insurance auxiliary service to PACL, Nayanangal and the demand of service tax of Rs. 55142/- was made accordingly. However, during the adjudication stage, adjudicating authority gave a finding that appellant had provided only insurance services to PACL, Nayanangal and not insurance auxiliary service. This fact is recorded in para-8 of the adjudication order. There is a demand of service tax amount of Rs. 55142/- along with interest and penalty which is being disputed in the present proceeding.
2. The defense of the appellant has been that they had issued insurance policies to cover the employees of PACL. The policy was issued to New Delhi office of PACL and they have received payment from the New Delhi office of PACL and they have also remitted service tax that was to be paid for such services. They categorically stated that they did not receive any payment from PACL, Nayanangal. PACL Delhi was at liberty to cover the employees working in PACL Nayanangal also under the scope of the policy. He pointed out that in the first place the Assistant Commissioner at Ropar had no jurisdiction to issue the Show cause Notice.
3. The counsel for the appellant submits that the basis on which Revenue stated that they received payment from PACL, Nayanangal. is not disclosed to them. Therefore, he submits that demand is not maintainable and the appeal may be allowed.
4. Opposing the prayer, Ld. AR for Revenue submits that the insurance service was provided in Ropar. So the Assistant Commissioner at Ropar had necessary jurisdiction to issue the notice. Once it was known was the appellant was centrally registered in LTU Chennai, corrigendum to SCN was issued asking to show cuse to the jurisdictional authority and thereafter adjudication was done. So he contests that the order is passed in exercise of proper jurisdiction.
5. He also relies on paragraphs 3, 5 and 5.1 of the order of Commissioner (Appeals) which are also reproduced below :-
3. Shri V.P. Prabhu, Assistant General Manager (Taxation) authorized by the appellant appeared before me on 18.7.12 at 12.45 PM. During the hearing, in addition to reiterating the submissions already made in the appeal memorandum and after filing additional written submission, has further submitted that since policy is issued by PACL, Head Office, New Delhi, no separate policy for Nayanangal. Head Office New Delhi policy covers all employees of PACL including those at Nayanangal. Certificate, to the above effect, from PACL, duly confirmed by the relevant Service Tax authorities will be produced in two weeks time. The appellant has filed a reply dated 14.8.12 [received on 17.8.12] and the same is taken on record.
..
5. It is seen from the impugned order that SCN was issued alleging non-payment service tax on the payments received from PACL, Nayanangal, whereas the appellants claim is that they have not received any payment from PACL Nayanangal. The appellant contends that insofar as service receiver PACL is concerned, payment is made for all the group insurance policies issued to employees of various branches of PACL situated all over India by PACL, Head office, New Delhi. Thus for the policies issued to employees of PACL, Nayanangal the premium was paid by PACL, New Delhi and for the said premium amount service tax has been paid by the appellant. Further, the appellant stated that they shall file a confirmation certificate from PACL, New Delhi as regards payment being made by them for insurance policies with reference to their employees situated all over India and more particularly for employees at Nayanangal. The appellant vide letter dated 14.8.12 stated that they had requested PACL, New Delhi for confirmation certificate, certifying that the Group Health Insurance Policies issued by them include all eligible PACL Employees including employees of PACL, Nayanangal but have not received any reply till date from them.
5.1 I do not agree with the appellants above contention inasmuch as the appellant failed to establish the onus in the instant case that they have not received any payment from PACL, Nayanangal. Having given a reasonable opportunity, they failed to obtain a confirmation certificate from PACL, New Delhi as said above. Therefore, I do not find any infirmity in the impugned order with regard to the demand of service tax along with interest and therefore, I uphold the same.
6. I have considered the submissions on both sides. What I find is that the SCN alleged non-payment of service tax on services provided to PACL, Nayanangal and payment received from PACL as recorded in para-4 of the SCN. SCN does not allege any payment directly from PACL, Nayanangal. During the adjudication stage, after the appellant has given submission that they were issuing policies to PACL New Delhi and receiving payment from that office, a finding was given that payment was received by the appellant directly from PACL, Nayanangal. No evidence to come to a finding other than what is alleged in the SCN is recorded in the adjudication order. In fact, if there is any finding, records relied upon should have been specified. Instead, Revenue has adopted a strategy of making allegation that the appellant have received payment directly from PACL, Nayanangal and then asking the appellant to prove that they have not received any such payment. I am of the view that such approach of asking the appellant to prove the absence of a fact is not in conformity with any judicial principle. If an allegation by Revenue was good enough to shift the burden of proof, then affirmation to the contrary by the appellant was also good enough to shift the burden back to Revenue, though I do not agree with either proposition. Revenue should have led evidence to prove that there was payment made directly by PACL, Nayanangal and that those were consideration for service provided on which service tax was not paid. In the absence of any such finding of facts I consider that the order is not maintainable. So I allow the appeal by setting aside the impugned orders of the lower authorities with consequential relief, if any.
(Dictated and pronounced in open court) (MATHEW JOHN) TECHNICAL MEMBER gs 7