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2015 (12) TMI 444 - CESTAT AHMEDABAD

2015 (12) TMI 444 - CESTAT AHMEDABAD - TMI - Cenvat Credit - service tax paid on insurance premium towards Mediclaim paid by the appellant claimed as Input Service Credit - Held that:- basic logic adopted by the High Courts and the Tribunal is that if the inputs/ input services are taken or provided in pursuance of statutory requirements, then the assessees are duty bound to observe the same and hence credit of duty/service tax paid on such inputs/ input services would be eligible. However, when .....

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ce Tax, Ahmedabad - [2012 (5) TMI 219 - CESTAT, AHMEDABAD] - appellant would not be eligible to take CENVAT credit in respect of the Mediclaim which is in the nature of a welfare measure and voluntary, in the instant case. Therefore, we uphold the order of the Commissioner (Appeals) in the said respect. - However, penalty is set aside - Decided partly in favour of assessee. - Appeal No. : ST/12371/2014 - ORDER No. A/11696 / 2015 - Dated:- 27-11-2015 - Mr. P.M. Saleem, Member (Technical) For the .....

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asset of their business and therefore, it should be treated as Input Service and the service tax paid on premium paid should be allowed to be taken as CENVAT credit. He sought to rely upon a few decisions of the Tribunal. On the other hand, learned Authorised Representative appearing for the Revenue submits that the Mediclaim is in the nature of welfare measure and is voluntary. The appellant is not statutorily bound to take the same and they are providing it as a welfare measure. He therefore, .....

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sions, it is observed that the basic logic adopted by the High Courts and the Tribunal is that if the inputs/ input services are taken or provided in pursuance of statutory requirements, then the assessees are duty bound to observe the same and hence credit of duty/service tax paid on such inputs/ input services would be eligible. However, when such inputs/ input services are taken by the employees or offered to the employees as welfare measure and is voluntary in nature, the same cannot be held .....

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ords. As regards Catering service, the authorized representative submitted that the Catering service was taken for the purpose of hosting a party for the client for business promotion and therefore credit has been taken correctly. However, the learned Authorised Representative pointed out that this point was not raised before both the lower authorities and was not mentioned in the appeal also. It was explained to authorized representative that in such event, an application for considering the ad .....

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and it was submitted that this will help to boost the employees morale and would result in improved business and therefore the credit is admissible. Ld. A.R. relied upon the decision of Honble High Court of Gujarat in the case of CCE v. Gujarat Heavy Chemicals Limited - 2011 (22) S.T.R. 610 (Guj.), wherein a view has been taken that Service Tax paid on welfare activity are not admissible as CENVAT Credit. At this stage, the authorized representative submitted that since the amount involved is .....

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decision of the Hon'ble Gujarat High Court in the case of Commissioner of Central Excise & Customs vs. Gujarat Heavy Chemicals Limited - 2011 (22) STR 610 (Guj.), which is reproduced below:- 11. Despite such wide connotation of the term input service as defined in Rule 2(1) of the Cenvat Rules, the question is whether the present case would be covered in the said definition. Facts are short and not in dispute. Respondent assessee, manufacturer of soda ash, has provided residential quar .....

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ture of the final product. This is also the view of the Bombay High Court in the case of Manikgarh Cement (supra). 12. We may notice that the Apex Court in the case of Maruti Suzuki Limited (supra) was of the opinion that the electricity generated by the assessee and cleared to grid for distribution would not be part of manufacturing activity and be categorized as input used in manufacture of final product. We are conscious that the said decision of the Apex court is referred to Larger Bench. Ho .....

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