Case Law Details
Tessy Engineers & Enterprises Vs Commissioner of GST & Central Excise (CESTAT Chennai)
The issue is as to whether the appellants are eligible for the credit availed on insurance services. The definition of input service with effect from 01.04.2011 excludes life and health insurance services availed for personal use or for personal consumption of employees. The appellants have explained that these insurance policies were availed for covering the risk of employees, who undertake works in their projects abroad. The labour legislations in India mandate that the employer covers the risk of such untoward incidents or injuries that may happen to the employees at work site. The Hon’ble jurisdictional High Court in the case of M/s. Ganesan Builders Ltd., (supra) has analysed the very same issue with regard to the definition of input service, after 01.04.2011 and held that credit on such insurance services is eligible. After appreciating the facts of the case as well as following the decision of the jurisdictional High Court, I am of the view that credit is eligible.
FULL TEXT OF THE CESTAT JUDGMENT
Brief facts are that the appellants are engaged in providing Erection and Commissioning or Installation Services [ECIS] in India as well as abroad. For the projects that are carried outside India, the appellants used to sent their skilled persons for attending the works outside India. Appellants took Overseas Mediclaim Insurance Policy for employees who were sent for undertaking works in their project abroad. The department issued show-cause notice proposing to disallow the credit on such insurance services alleging that these are excluded from the definition of “Input Services”. After due process of law, the original authority disallowed the credit and confirmed the demand along with interest and also imposed penalty. In appeal, the Commissioner (Appeals) upheld the same. Hence this appeal.
2. On behalf of the appellants, the learned counsel Ms.S. Sridevi submitted that the insurance policies are taken in the name of the employees who are deputed to undertake the works in the projects abroad. These are not for the personal use or for the consumption of employees. The policies have been taken as per the mandate of labour legislations. It is incumbent upon the appellants to provide insurance to such employees to meet the risk of injuries/untoward incidents at the place of employment. She relied upon the decision in the case of M/s. Ganesan Builders Ltd. Vs Commissioner of Service Tax, Chennai reported in 2019 (20) G.S.T.L.39 (Mad.) to support her arguments.
3. The learned Authorised Representative Shri L. Nanda Kumar supported the findings in the impugned order.
4. Heard both sides.
5. The issue is as to whether the appellants are eligible for the credit availed on insurance services. The definition of “input service” with effect from 01.04.2011 excludes life and health insurance services availed for personal use or for personal consumption of employees. The appellants have explained that these insurance policies were availed for covering the risk of employees, who undertake works in their projects abroad. The labour legislations in India mandate that the employer covers the risk of such untoward incidents or injuries that may happen to the employees at work site. The Hon’ble jurisdictional High Court in the case of M/s. Ganesan Builders Ltd., (supra) has analysed the very same issue with regard to the definition of “input service”, after 01.04.2011 and held that credit on such insurance services is eligible. After appreciating the facts of the case as well as following the decision of the jurisdictional High Court, I am of the view that credit is eligible. The impugned order is set aside. The appeal is allowed with consequential reliefs, if any.
(Dictated and pronounced in open court)
