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2019 (3) TMI 1276 - AT - Central ExciseCENVAT credit - input services - group insurance mediclaim / health policies - period April 2013 to March 2015 and April 2016 to March 2017 - Held that - In the present case, the appellant has taken one consolidated mediclaim policy for its employees and their family members and have paid the premium for group mediclaim to M/s. New India Assurance Company Ltd. Further the option is given to the employees to include insurance cover for their family members on payment of some premium by them which will be deducted from their salary annually. Further, the appellants have paid the service tax on the amount recovered from the employees towards mediclaim insurance paid for their family members and the appellants have taken the CENVAT credit for the same. The facts of the decision in the case of Titan Industries Ltd. 2018 (4) TMI 966 - CESTAT CHENNAI , is squarely applicable to the facts of the present case, where the Division Bench of this Tribunal has held that group mediclaim policy taken for dependents / family members of company s staff and employees cannot be considered to be directly or indirectly related to manufacture and hence the assessee cannot claim CENVAT credit on the premium paid by the employees. The appellants are not entitled to the CENVAT credit of service tax paid by them - Appeal dismissed - decided against appellant.
Issues:
- Disallowance of CENVAT credit on group insurance mediclaim/health policies for specific periods. - Interpretation of Rule 3(1) and Rule 14 of CCR. - Applicability of CENVAT credit on insurance premium for employees' family members. - Consideration of input services directly or indirectly related to manufacturing. Analysis: The appeals were filed against an order disallowing CENVAT credit on group insurance mediclaim/health policies for the periods April 2013 to March 2015 and April 2016 to March 2017. The appellant, a manufacturer, was issued show-cause notices regarding irregular CENVAT credit on services like e-mail/internet, HRM services, and insurance mediclaim, deemed inadmissible as not directly or indirectly related to manufacturing. The Jt. Commissioner allowed CENVAT credit for some services but disallowed a significant amount. The Commissioner(Appeals) partially allowed the appeal, reducing penalties. The Tribunal remanded the matter for reconsideration, resulting in disallowance of CENVAT credit and imposition of penalties. The appellant argued that the premium paid for group mediclaim included coverage for employees' family members, acting as an intermediary, and paid service tax on the premiums. They cited circulars and legal precedents to support their claim. The respondent contended that CENVAT credit for insurance premium for dependents of employees was not admissible, citing tribunal decisions where such credits were denied. The Tribunal found that the appellant had a consolidated mediclaim policy for employees and their families, with employees having the option to include family members at their expense. The appellant paid service tax on family members' premiums and claimed CENVAT credit. The Tribunal distinguished the appellant's case from legal precedents cited, upholding the disallowance of CENVAT credit based on the nature of the insurance services provided. The Tribunal referenced various tribunal decisions supporting the denial of CENVAT credit for insurance services related to employees' family members, concluding that the appellant was not entitled to the claimed credit. In the final judgment, the Tribunal upheld the disallowance of CENVAT credit on insurance premiums for employees' family members, following the precedents and legal interpretations provided. The Tribunal found no merit in the appellant's arguments and dismissed the appeals, affirming the decision to deny the CENVAT credit based on the specific circumstances of the case. The judgment was pronounced in open court on 19/03/2019.
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