2018 (4) TMI 830 - AT - Central Excise

CENVAT credit - premium paid for group medi-claim policies for employees' family members - Held that - the employee is earning not for himself but also for the family members - The benefit of the insurance to the family members is allowable as per the ratio laid down in the case of M/s EXL Service 2017 (5) TMI 1461 - CESTAT NEW DELHI , where it was observed that the benefit can be extended to the employees and their family members - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Allowability of Cenvat credit on group medi-claim policies for employees and their family members.

Analysis:
The case involves an appeal regarding the availment of Cenvat credit on group medi-claim policies for employees and their family members by a company engaged in the manufacture of clinker and cement, subject to Central Excise duty. The appellant contested the Commissioner (Appeals)'s decision to allow the credit only for the employees but not their family members. The appellant argued that based on precedents like Stanzen Toyotetsu India Pvt. Ltd. and M/s EXL Service Com (India) Pvt. Ltd., the credit should be extended to the entire family. On the contrary, the Departmental Representative relied on the case of Maruti Suzuki India Ltd. to support the denial of benefits to family members. However, the Tribunal noted that the denial in the Maruti Suzuki case was based on specific contractual terms not present in the current scenario.

The Tribunal, after considering the arguments and precedents, concluded that the benefit of insurance coverage should be extended to the family members of the employees as well. Citing the case of M/s EXL Service, the Tribunal emphasized that employees work not only for themselves but also for their families. Therefore, the Tribunal set aside the impugned order and allowed the appeals, ruling in favor of the appellant. The decision was based on the principle that the premium paid on the group policy for both employees and their family members is eligible for Cenvat credit, aligning with previous judicial interpretations and the broader purpose of employee benefits and welfare.

In summary, the judgment clarified the scope of Cenvat credit eligibility for group medi-claim policies, emphasizing the inclusion of family members in such benefits based on established legal precedents and the rationale of employees working for the collective welfare of their families. The decision provided a favorable outcome for the appellant, overturning the previous order and allowing the Cenvat credit for both employees and their family members under the relevant rules and interpretations.