2015 (7) TMI 1142 - AT - Central Excise

CENVAT credit - service tax paid on Group Insurance Policy taken for the family members - Group Insurance Policy taken for the family members of the employee is input service or not? - Held that - the decision in the case of PTC Software India (P) Ltd. vs CCE Pune-III 2014 (12) TMI 498 - CESTAT MUMBAI relied upon where it was held that the appellant is rightly entitled to take credit of Service Tax paid on insurance premium on group insurance policy as the said service is an eligible input service. Distribution of input service paid by the ISD - Held that - the Chartered Accountant upon verification of the books of accounts of the appellant has certified the actual amount of service tax distributed by the head office to the appellant under the cover of proper and valid invoice. On the basis of such invoice the credit has been taken by the appellant. Since the practicing Chartered Accountant firm has certified that the credit has been distributed correctly the same cannot be denied without adducing any other evidence proving these facts as wrong - cenvat credit distributed by the ISD and taken by the appellant based on the valid invoice cannot be denied to the appellant. CENVAT credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Denial of cenvat credit on Group Insurance Policy for family members of employees.
- Denial of cenvat credit due to improper distribution by Input Service Distributor (ISD).

Analysis:
1. The appeals challenged an order upholding a cenvat demand due to the denial of cenvat credit on a Group Insurance Policy for employees' family members and improper distribution by the ISD. The appellant argued that the service tax paid on such insurance premiums should be eligible for cenvat credit, citing a relevant Tribunal decision. Additionally, the appellant's head office, registered as an ISD, properly distributed service tax credits to different units, supported by a Chartered Accountant's certification.

2. The respondent, however, relied on previous judgments to support the denial of credit on the disputed services. The Tribunal considered both arguments and verified the records. Regarding the denial of credit for the insurance policy, the Tribunal referred to a previous Tribunal decision that supported the appellant's position. Concerning the ISD's distribution, the Tribunal noted the Chartered Accountant's certification confirming the correct distribution of service tax credits based on valid invoices.

3. The Tribunal concluded that the cenvat credit denial was unfounded. It emphasized that the ISD's distribution, certified by a Chartered Accountant, should not be denied without evidence proving it incorrect. Therefore, the Tribunal ruled in favor of the appellant, setting aside the impugned orders and allowing the appeals. The judgment highlighted the importance of proper certification and valid documentation in cenvat credit distribution disputes.