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M/s. Murugappa Morgan Thermal Ceramics Ltd. Versus Commissioner of Central Excise, Chennai-III

2016 (4) TMI 370 - CESTAT CHENNAI

Eligibility of Cenvat credit - Service tax paid on Health Insurance Services for the coverage of employees, spouse, dependent children and parents etc. - Department contended that the impugned service is not covered under the definition of the input service vide Rule 2(l) of Cenvat Credit Rules, 2004, Held that:- it is found that when employees are at work in the factory, if an accident happens, the employer is liable to pay compensation and a prudent businessman will be interested in taking an .....

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er employees of the company. In the case of premium attributable to the families of employees it cannot have any direct nexus and will not qualify as input services. By following the judgment of Hon’ble High Court of Karnataka in the case of CCE, Bangalore-III Vs. Stanzen Toyotetsu India (P) Ltd. [2011 (4) TMI 201 - KARNATAKA HIGH COURT], the medical insurance in relation to the employees of the company are within the broad definition of input service as per Rule 2(l)ibid. Hence, the impugned or .....

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the appellant since they have availed credit of ₹ 96,629/- being the service tax paid on Health Insurance Services for the coverage of employees, spouse, dependent children and parents etc. in Cholamandalam General Insurance Company. The adjudicating authority in his order-in-original No. 34/2012-CE dated 18.12.2012 held that the impugned service of group insurance coverage for the employees spouses, dependent children and dependent parents is not covered under the definition of the input .....

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Ld. Counsel Shri M. Kannan, Advocate, appearing on behalf of the appellant Company reiterates the ground of appeal and submits that the accidental death or even sickness of employees cause disruption in business activities and can also involve unforeseen expenditure to be met by the appellant. To protect the company against such exigencies these policies are taken and the premium paid goes into manufacturing cost of excisable products and hence this service is needed in relation to manufacture .....

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prays that the whole matter was a question of interpretation of legal provisions and there was no mala fide intention while taking the credit and therefore the penalty imposed may be set aside. In support of his arguments, he relies on the decision of the Hon ble High Court of Karnataka in the case of CCE, Bangalore-III Vs. Stanzen Toyotetsu India (P) Ltd. Reported in 2011 (23) STR 444 (Kar.). He further relies on the decision of this Tribunal in the case of Sundaram Brake Linings Vs. CCE, Chenn .....

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