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2019-VIL-92-CESTAT-HYD-ST

SERVICE TAX CESTAT Cases

Service Tax - Cenvat Credit – exempted service - Life insurance services - whether investing of premiums collected in the approved securities can be considered as an exempt service covered under “Trading of Goods” (Securities) warranting reversal of CENVAT Credit under Rule 6 of CCR - Assessee-appellant submission that the investment activity is mandatory to insurance business and the entire service being subjected to tax, it couldn’t be considered as exempted services – HELD - the investment activity undertaken by the appellant is an integral part of life insurance service and cannot be divested from the same. As the service being rendered by the appellant is that of life insurance, which is a taxable service, it cannot be said that appellant is rendering any exempted service - even otherwise Rule 6 of CCR 2004, applies in a case where credit on inputs and input services i.e. common to rendition on taxable and exempted services has been availed of, in the instant case the only service that the appellant is rendering is life insurance service, which is taxable entirely. Thus, it cannot be said that appellant has availed any credit on input and input services which is common or attributable to rendition of any exempted services - as the activity of managing investments suffers service tax liability under life insurance services, the same cannot be said to be an exempted service, warranting reversal of CENVAT Credit under Rule 6 of CCR - the appeal filed by appellant assessee is allowed and the appeal filed by the Revenue is rejected

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