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January 2014

2013 (32) STR 430 (Tri-Chennai) Cholamandalam MS General Insurance Co. Ltd vs. CCE ST-LTD Chennai.

By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
Reading Time 1 mins
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Whether passing of credit entry in the accounts tantamount to refund of money?

Facts:
Appellant an insurance service provider adjusted the service tax refunded to the intermediaries on the cancelled insurance policies against the service tax liability on the insurance premium for subsequent period. Revenue objected to the adjustment after noticing that in case of intermediaries, Appellant did not refund the actual amount of cancelled premium and service tax by way of cheque but had passed credit entries in the balances appearing in its books of accounts. Respondent considered this to be unsatisfactory, confirmed the demand.

Held:
Tribunal observed that, prima facie a credit in the account of intermediaries amounted to refund of money, however for the purpose of verification of the claim, the matter was remanded for de-novo adjudication.

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