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2019 (7) TMI 652

rance in question was not for the personal benefit of any individual or Director, it only covers any liability that may arise on them in the course of their official work. Therefore, respectfully concurring with the decision of CESTAT, Chandigarh in the case of Ernst and Young Associates [2017 (10) TMI 456 - CESTAT CHANDIGARH] , the appellant is entitled for the benefit of CENVAT credit under Rule 2(l) and consequently refund under Rule 5 of CCR 2004 in respect of this invoice - refund allowed. IFFCO-TOKIO General Insurance Co. Ltd. - three invoices providing medical insurance for the employees and their families - HELD THAT:- It does not appear that all the services listed in the above clause have to be relatable to employees being on vacation such as Leave or Home Travel Concession. Such an interpretation would lead to absurd conclusions. It is inconceivable that the company provides outdoor catering to an employee who is on leave or home travel concession. Similarly it is absurd to say that the company may be providing beauty treatment or health services or plastic surgery or membership of a club, health and fitness centres etc., while the employee is in vacation or Home travel .....

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surance Service ₹ 10,67,130 On perusal of the documents (Input invoices) submitted, it was observed that the insurance premium was paid for the benefit of the employees and their respective family members and is in the nature of life insurance. The appellants have not established that the said insurance is in the nature of accident insurance or its being pertaining to the assets of the company or it was statutorily required under any law. Since the Insurance premium has been paid for the benefit of the employees as well as their families, it specifically falls under the exclusion clause of the definition of input service under Rule 2(1) of the CCR. 2. Works Contract Service ₹ 1,52,210 On perusal of the documents i.e. copies of the invoices submitted by the appellants it was observed that, 3 out of 5 documents submitted by the appellants indicate the nature of the activity being relatable to civil works in connection with alterations/replacements undertaken on the structure of the premises of the appellants and thus fall under the exclusion clause under Rule 2(l)(A) read with explanation II to Section 66E of the Finance Act, 1994. 3. Meals Coupons and food bills ₹ .....

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iding an output service; or (ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products up to the place of removal, and includes services used in relation to modernisation, renovation or repairs of a factory, premises of the provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage up to the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation up to the place of removal; but excludes: (A) service portion in the execution of a works contract and construction services including (hereafter referred to as specified services) in so far as they are used for - (a) construction or execution of works contract of a building or a civil structure or a part thereof; or (b) laying of foundation or making of structures for support of capital goods, except for the provision of one or mo .....

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ld that the appellant is entitled for the benefit of CENVAT credit under Rule 2(l) and consequently refund under Rule 5 of CCR 2004 in respect of this invoice. 9. IFFCO-TOKIO General Insurance Co. Ltd.: These three invoices provide medical insurance for the employees and their families. Ld. CA argues that they should be entitled CENVAT Credit as well as refund of credit on these services. He relies on the case law of Sundaram Fasteners Limited [2016(43) S.T.R. 454 (Tri.-Chennai) and Fiem Industries Limited [2016(43) S.T.R (Tri.- Chennai)]. In both these case laws, the Ld. Member held that the health insurance is excluded only if it is relatable to the travel of an employee on vacation not otherwise. Ld. DR asserts that a plain reading of the exclusion clause C of Rule 2(l) of CCR, 2004, health insurance is excluded and not merely health insurance while on vacation. Therefore, no CENVAT Credit is admissible on these invoices. I have gone through the relevant clause which reads as follows: Such as those provided in relation to outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insu .....

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to Works Contract Services. A perusal of the invoices shows that they pertain to preparation of caution signages and scaffolding for facade glass and fixing of thick toughen glass, lift low side work purpose etc. It is the contention of Ld. CA that Rule 2(l) of CCR 2004 includes services used in modernisation, renovation or repairs of a factory premises of provider of output services or an office relating to such factory or premises. Therefore, they are clearly entitled to CENVAT credit on this account. Ld. DR, on the other hand, asserts that the definition of input service as above is subject to the exclusion specifically indicated in clauses (A), (B), (BA) and (C). Clause A explicitly excludes service portion in exclusion of the works contract and construction services insofar as they are used for (a) construction or execution of works contract of a building or a civil structure or a part thereof, or (b) laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services . He would argue that the works contract services used in relation to execution of works contract of a building have been specifically excl .....

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