ThyssenKrupp Industries Pvt. Ltd. Vs Commissioner of CGST & CE (CESTAT Mumbai)
CESTAT held that Commissioner (Appeals) should not have denied Cenvat Credit in respect of group mediclaim policy and personal accident policy to the extent it pertains to the employee only. However, the case law cited above although say that the benefit should not be admissible to that part of the service which is in respect of the family members of the employees, as I do not have the breakup of the part which is in respect of the employees and that in respect of family members of the employee, the matter needs to be remanded back to the original authority for determination of the credit amount which is in respect of the family members of employee.
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.
FULL TEXT OF THE CESTAT MUMBAI ORDER
This appeal is directed against Order-in-Appeal No. PI/RKS/111/2012 dated 15.05.2012 of the Commissioner of Central Excise (Appeals), Pune-I. By the impugned order, the Commissioner (Appeals) has held as follows:-
“ORDER
17. I set aside the impugned Order-in-Original No.PI/ADC/CEX/56/2011, dated 25.01.2012/08.02.2012, passed by the Additional Commissioner, Central Excise, Pune-1 Commissionerate, in so far as it relates to disallowance of input service credit in respect of Service Tax paid on Insurance policies, as discussed and held in paras 14 & 15 above. However, I uphold the impugned Order, in so far as it relates to disallowance/recovery of inadmissible input service credit on Service Tax paid amounting to Rs. 16,24,896/-, in respect of Insurance policies, as discussed and held at Sl.No. (vii) and (viii) of para 14 above, alon gwith interest thereon, under the provisions of Rule 14 of Cenvat Credit Rules, 2004, readwith Section 1 1A of Central Excise Act, 1944, and Section 1 1AB ibid. I further reduce the amount of penalty imposed on the appellants under Rule 15(1) ibid from Rs. 10,00,000/- to Rs. 7,50,000/- only, as discussed & held in para 16 above.
18. The appeal filed by the appellants is thus partially allowed in above terms & the impugned Order-in-Original is modified to the above extent.”
2.1 Appellants are registered with Central Excise for manufacturing various excisable goods viz. Machinery/parts/ equipments of sugar plant, cement plant, boilers and bulk material handling systems. They are also availing the benefit of cenvat credit scheme as provided for under Cenvat Credit Rules, 2004. They are also providing taxable services such as consulting engineering services, maintenance or repair services, erection, commissioning and installation services, test, inspection and certification services, commercial or industrial construction services, works contract services, business auxiliary services etc.
2.3 During scrutiny of records, it was observed that the appellants have availed cenvat credit in respect of general insurance L.D. policy; special contingent policy for baggage of employees while travelling by air etc; burglary and house‑breaking policy for employees; credit card policy, fidelity guarantee policy, mediclaim policy for employees and their families; personal accident policy; corporate protection policy against terrorism 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:-
