Order Date – 22 February 2023

Parties: M/s. United India Insurance Co. Ltd. Vs Commissioner of GST & Central Excise

Facts –

• The Appellant, M/s. United India Insurance Co. Ltd.(UIIL),  was found to be liable to pay service tax on the service provided by M/s. SSP Sirius Ltd. UK (SSPSL) as ‘Core Insurance Solution’ for use in the business of UIIC, since SSPSL was incorporated in UK and have no permanent establishment in India.
• The appellant had paid the amount along with interest, subsequently they sought refund of the same as they were of the view that no tax was payable on the supply even prior to the introduction of the service in the Finance Act. But Revenue confirmed the duty paid and also imposed penalty by issuing show cause notice dated 08/06/2011.

Issue –

• Whether the appellant is liable to pay tax on ‘Core Insurance Solution’?

Order –

• The Tribunal observed that it is not disputed that the software was downloaded in December 2007 while the said service was brought under the tax net only on 16/05/2008.
• The ‘right to use information technology software supplied electronically’ would hence only commence only after due payment i.e. on 22.07.2008 and at this point the liability to pay tax would get fastened as per the facts and circumstances of this Agreement. This being so the service has been supplied only after Information Technology Software Service was brought under the tax net and is hence subject to the levy.
• The Adjudicating Authority has in the impugned order given clear reasons as to why the allegations of suppression of facts and intention to evade tax has been arrived by him for invoking the extended time limit. It has been held by Constitutional Courts that appellate bodies cannot be unmindful of the great weight to be attached to the findings of facts of the Original Authority who has first hand knowledge and is in a position to assess the facts and the credibility of circumstances from his own observation.
• Hence the appeal dismissed.