Case Law Details
M/s. BPL Telecom Pvt. Ltd Vs Commissioner of Central Excise (CESTAT Bangalore)
prior to the amendment in the definition of input service e.f 1.4.2011, the scope of input service was very wide and it includes all the services which fall in or in relation to the manufacture of final product. Further, I find that the appellants are entitled to CENVAT credit of service tax paid on insurance premium in respect of dependent/family members of the employees. Further, I find that the Tribunal in the case of Ramboll Imisoft Pvt. Ltd. has allowed the service tax paid on insurance premium in respect of the dependents/family members holding that it is an input service. By following the ratio of the same, I am of the view that the denial of CENVAT credit on insurance premium is wrong and untenable, therefore, I set aside the impugned order by allowing the appeal of the appellant.
FULL TEXT OF THE CESTAT ORDER IS AS FOLLOWS:-
The present appeal is directed against the impugned order dated 11.1.2016 passed by the Commissioner (A), whereby the Commissioner (A) has rejected the appeal of the appellant.
2. Briefly the facts of the present case are that the appellants are manufacturers of different models of EPABX. They are availing CENVAT Credit on certain inputs and input services as per CENVAT Credit Rules (CCR), 2004. Appellants had taken input credit on the service tax paid on insurance policies under Group Insurance Scheme in the month of July 2010 amounting to 1,67,912/-. Thereafter, a show-cause notice was issued on the premise that the services received by the appellant from the said insurance companies in relation to insurance scheme taken by them are not input service and hence, appellant is not entitled to avail CENVAT credit and utilize the same for payment of Central Excise duty. After following due process, the original authority confirmed the demand along with interest and penalty. Aggrieved by the said order, appellant filed appeal before the Commissioner (A), who rejected the appeal. Hence, the present appeal.
3. Heard both the parties and perused the records.
4. Learned counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without properly considering the definition of ‘input service’ as provided under Rule 2(l) of CENVAT Credit Rules, 2004. He further submitted that the group medical insurance taken on the employees and their families is an essential input service; hence, the appellant is entitled to take credit of the service tax paid on such service. He further submitted that the definition of input service is very wide and includes all services which are availed in or in relation to business. He also submitted that the period involved in the present appeal is prior to the amendment of definition of input service whereby certain services were specifically excluded. In support of his submission, he relied upon the decision in the case of Ramboll Imisoft Pvt. Ltd. :2017 (47) STR 61 (Tni. -Hyd.).
5. On the other hand, the learned AR defended the impugned order.
6. After considering the submissions of both the parties, I find that prior to the amendment in the definition of input service e.f 1.4.2011, the scope of input service was very wide and it includes all the services which fall in or in relation to the manufacture of final product. Further, I find that the appellants are entitled to CENVAT credit of service tax paid on insurance premium in respect of dependent/family members of the employees. Further, I find that the Tribunal in the case of Ramboll Imisoft Pvt. Ltd. has allowed the service tax paid on insurance premium in respect of the dependents/family members holding that it is an input service. By following the ratio of the same, I am of the view that the denial of CENVAT credit on insurance premium is wrong and untenable, therefore, I set aside the impugned order by allowing the appeal of the appellant.
(Order was pronounced and dictated in Open Court on 06/04/2018)
