2014 (10) TMI 308 - AT - Service Tax

Denial of CENVAT Credit - mediclaim policy and transportation of employees - Held that - Facility of transport was provided to the workers to take them to the factory. When such a welfare measure is not provided to workers no Cenvat credit shall be admissible looking to spirit of Rule 21 of Cenvat Credit Rules defining input service. No relation to manufacture having been established from the transportation activity, first appellate order to this extent is erroneous. So far as Revenue s grievance of mediclaim policy is concerned that does not indicate from the fact that the mediclaim was granted to anybody else other than workers. This clearly is welfare measure to the workers. In absence of any cogent finding that the mediclaim relates to employees not working in the factory, Revenue s appeal on this count is not sustainable - Decided partly in favour of Revenue.

Summary

The Appellate Tribunal CESTAT NEW DELHI allowed Revenue's appeal partly. Cenvat credit for transportation of employees disallowed as welfare measure not provided to workers for factory transport. Cenvat credit for mediclaim policy granted to workers upheld as welfare measure. No cogent finding that mediclaim relates to non-factory employees.