2017 (9) TMI 1261 - AT - Service Tax

CENVAT credit - input services - Group Insurance Policy for employees - Professional Indemnity Service - Held that - the assessee is service provider and these services has been received by the appellant in the course of their business of providing output service - any services availed by the assessee who is provider of output service is entitled to avail cenvat credit on the services used for their business of providing output service - the assessee is entitled to avail cenvat credit on both the services in dispute - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of cenvat credit on Group Insurance Policy for employees.
2. Allowance of cenvat credit on Professional Indemnity Insurance.

Analysis:
1. The case involved the denial of cenvat credit on Group Insurance Policy for employees by the assessee. The dispute arose regarding whether these services qualified as input services under Rule 2(l) of the Cenvat Credit Rules, 2004. The Ld. Commissioner (A) allowed cenvat credit on Professional Indemnity Insurance but denied it on Group Insurance Policy. The Tribunal referred to the decision of the Hon'ble High Court of Bombay in the case of Ultratech Cement Pvt. Ltd. and held that any services availed by the assessee, who is a provider of output service, are entitled to cenvat credit. The Tribunal found that the assessee, being a service provider, received these services in the course of their business, making them eligible for cenvat credit. Therefore, the appeal filed by the assessee was allowed.

2. The second issue revolved around the allowance of cenvat credit on Professional Indemnity Insurance. The Tribunal noted that the services of Rent a Cab, Asset Insurance, Health Insurance, and Professional Indemnity Insurance were received by the assessee in their business of export of service. Referring to the decision of the Hon'ble High Court of Bombay and CBEC Circular No.943/04/2011-CE, the Tribunal upheld the Ld. Commissioner (A)'s decision to allow cenvat credit on Professional Indemnity Insurance. The Tribunal emphasized that services availed by the assessee who is a provider of output service are eligible for cenvat credit on services used for their business of providing output service. Consequently, the appeal filed by the Revenue, seeking to challenge the allowance of cenvat credit on Professional Indemnity Insurance, was dismissed.

In conclusion, the Appellate Tribunal CESTAT CHANDIGARH, in the cited judgment, allowed the appeal filed by the assessee regarding the denial of cenvat credit on Group Insurance Policy for employees and dismissed the appeal filed by the Revenue challenging the allowance of cenvat credit on Professional Indemnity Insurance. The Tribunal's decision was based on the eligibility of the assessee, a service provider, to avail cenvat credit on services received in the course of their business of providing output service, as established by legal precedents and relevant circulars.