2017 (2) TMI 538 - AT - Service Tax

Cenvat Credit - 100% EOU - Refund claim - rejection on the ground of nexus - telecommunication services - Insurance services - Held that - Merely because the SIM card or invoice is in the name of the employee it cannot be concluded that the mobile phone is for personal use of the employee when the address shows that of the company - refund allowed. Insurance services - Held that - Though in the definition of input services it is mentioned that life insurance health insurance etc. are excluded it is subject to the condition that such services are primarily for personal use or consumption of employee - None of the above insurance services can be said to be used primarily for personal use or consumption of employee - refund to be allowed. The appellant is eligible for refund - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against rejection of refund claim for the period October 2012 to March 2013.

Analysis:
1. The appellant, a 100% EOU providing integrated IT solutions, filed a refund claim under Rule 5 of CENVAT Credit Rules, 2004, seeking ?5,95,950. The original authority granted ?4,15,434 and rejected ?1,80,516. The Commissioner (Appeals) upheld the rejection, leading to the current appeal.

2. The appellant's services were detailed, including legal services, interior works, telecommunication, insurance schemes, and more. The rejection of refund was based on a lack of nexus with the output services. The appellant cited relevant case laws to support their claim.

3. The appellant's counsel argued that services like group gratuity insurance, employee deposit linked insurance, and employee health insurance were essential statutory compliance measures, not primarily for personal use. The appellant's explanations and legal precedents supported their eligibility for a refund.

4. The Commissioner's Assistant Commissioner reiterated the denial of credit for life and health insurance services, claiming they were for personal use. However, the appellant provided compelling arguments and legal references to counter this stance.

5. The Tribunal considered the nature of the services, the legislative intent behind insurance schemes, and the welfare of employees. Relying on legal precedents and the appellant's submissions, the Tribunal concluded that the appellant was indeed eligible for the refund. The impugned order was set aside, and the appeal was allowed with consequential reliefs.

This detailed analysis of the judgment highlights the key arguments, legal interpretations, and conclusions reached by the Tribunal regarding the rejection of the refund claim.