TMI Blog2022 (9) TMI 1121X X X X Extracts X X X X X X X X Extracts X X X X ..... ployee. Time Limitation - HELD THAT:- The facts in respect of availment of Cenvat Credit in respect of these services was in the knowledge of the Revenue, neither the show cause notices nor the order-in-original have given any reason for invoking extended period of limitation - In absence of any finding of existence of the ingredients required for invocation of extended period of limitation, there are no merits in invoking the same for making the demand of inadmissible cenvat credit. The order to this extent is set aside and also the order to the extent it pertains to imposition of penalty under Rule 15(1) of Cenvat Credit Rules. The appeal is partly allowed to the extent as indicated above and the matter remanded back to the original authority for redetermination of the inadmissible cenvat credit i.e. in respect of the insurance services pertaining to the family members of the employee of the appellant. - Excise Appeal No. 1008 of 2012 - A/85837/2022 - Dated:- 12-9-2022 - HON BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) Shri S. Narayanan, Advocate, for the Appellant Shri P.K. Acharya, Superintendent, Authorised Representative for the Respondent ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rorism etc., which are not covered under the definition of Input Service . 2.4 Accordingly two show cause notices dated 15.04.2011 and 29.08.2011 were issued to the appellant asking them to show cause as to why the inadmissible credit of Rs.29,84,224/- availed by them during the period from October 2009 to March 2011 should not be recovered from them along with interest. The show cause notices also proposed penalty under the provisions of Rule 15(1) of the Cenvat Credit Rules. 2.5 The show cause notices were adjudicated by the Additional Commissioner confirming the entire demand of cenvat credit along with interest and imposing penalty of Rs.10,00,000/-. Appellant preferred appeal to the Commissioner (Appeals) who vide the impugned order referred in para 1 above has decided the appeal. 3.1 I have heard Shri S. Narayanan, Advocate for the appellant and Shri P.K. Acharya, Superintendent, Authorised Representative for the Revenue. 3.2 Arguing for the appellant, learned counsel submits:- That the Commissioner (Appeals) has allowed cenvat credit in respect of all other services except for group mediclaim policy and personal accident policy. Against the part allowed, R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ployees, and is not essential for their business activities. I therefore, hold that the appellants are not eligible to avail Cenvat credit on the Service Tax paid on the same, as it has no relation whatsoever to the business. (viii) Personal Accident Policy - Rs 22,993/- Rs 90,201/ The appellants have contended that this policy is obtained for the employees and covers the loss arising due to any accident and as the policy is in relation to the company's business activities, the credit cannot be disallowed. In this regard, I find that the said Insurance is for the benefit of the employees and is more in the nature of perquisite to the employees, rather than in relation to their business and hence the same cannot be considered in relation to their business activities. I therefore, hold that the appellants are not eligible to avail Cenvat credit on the same, as it has no relation whatsoever to the business. 15. In view of the above discussions, I hold that the appellants are eligible to avail Cenvat credit in respect of Service Tax paid on insurance consultation charges as well as, all the insurance policies obtained by them, except in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance is not relation to the manufacturing activity. Even in the case of health insurance of the workmen, when employees fall sick, it is necessary that they are provided proper treatment so that they are brought back to work without loss of man hours and disruption of manufacturing lines and the employer may take insurance for arranging proper medical attendance for sick workman or other employees of the company. Therefore, the medical insurance in relation to the employees of the company are also within the broad definition of input service given at Rule 2(l) of the Cenvat Credit Rules, 2004. It is this position that has been affirmed by the Hon ble Karnataka High Court in the two judgments cited above. 6. Though the decision of the Hon ble Gujarat High Court in Cadila Healthcare (supra) explains the scope of the expression in relation to business it has not examined with reference to accident insurance health insurance of employees which is the subject matter of this appeal. When there is a direct decision of a High Court, on the particular service in question, it is only proper that the same is followed. Therefore, I follow the decision of the Hon ble Karnataka High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the appellant as the entire credit was reversed by them on their own. In the case of Biesse Manufacturing Co. Ltd. (supra), there is no specific discussion on the admissibility of credit in respect of family members and the said decision relies solely on other decisions in respect of the group health insurance without any findings in respect of admissibility of credit on the said insurance in respect of family members. On the other hand in the case of Semco Electric Pvt. Ltd. (supra) relied upon by the Ld. AR, it is seen that there is a specific discussion in respect of the said services. The said order observes as follows : (4) Insurance Services : The input service credit on insurance is denied on the ground that these insurance has been taken for the family members of the employees which is in nature of perquisites. I do agree with the finding of the lower appellate authority as the insurance of family members of the employees has no concern with the business of manufacturing of the appellant. The appellants relied on the decision of Millipore India Ltd. v. Commissioner of Central Excise, Bangalore-II reported in 2009 (13) S.T.R. 616 (Tri.-Bang.) = 2009 (236) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit, as above, which they were not eligible for, interest is also chargeable/recoverable from them under the provisions of Rule 14 of CCR, 2004 read with Section 75 of the Finance Act, 1994 and erstwhile Section 11AB of Central Excise Act, 1944 as applicable for the relevant period. Furthermore, I hold that the assessee is also liable for imposition of penalty under Rule 15(1) of Cenvat Credit Rules 2004 for the discussions finding in the forgoing paras. 5.1 In absence of any finding of existence of the ingredients required for invocation of extended period of limitation, I do not find much merits in invoking the same for making the demand of inadmissible cenvat credit. The order to this extent is set aside and also the order to the extent it pertains to imposition of penalty under Rule 15(1) of Cenvat Credit Rules. 6.1 The appeal is partly allowed to the extent as indicated above and the matter remanded back to the original authority for redetermination of the inadmissible cenvat credit i.e. in respect of the insurance services pertaining to the family members of the employee of the appellant. 6.2 As the matter is substantially old, the adjudicating authority shou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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