2018 (5) TMI 101 - AT - Central Excise

CENVAT credit - Premium towards group Medical Insurance policy to employees and their families - Held that - the premium paid in relation to coverage extended to the family members would not be eligible if separate premium is required to be paid - From the records, it is not clear whether separate premium is required to be paid for including the insurance coverage family members. To ascertain the said fact, the matter needs to be remanded to the adjudicating authority. Premium paid towards the employees located at Chennai - Held that - appellant submits that the employees are stationed their factory at Vadodara but have been sent to Chennai for discharging certain functions, therefore, service tax paid on insurance policy of said employees are eligible to credit - This fact has also not been verified. Appeal allowed by way of remand.

Summary

Issues involved:
1. Entitlement to avail credit of service tax paid on the Premium towards group Medical Insurance policy to employees and their families.

Analysis:
The appeal in question was directed against the order-in-appeal passed by the Commissioner of Central Excise (Appeals) Vadodara. The central issue at hand was whether the appellant was entitled to avail credit of service tax paid on the Premium towards group Medical Insurance policy for employees and their families. The appellant contended that as per Labour Laws provisions, ensuring employee insurance against workplace risks qualifies as an input service eligible for credit. Reference was made to judgments from the Hon'ble Karnataka High Court and various Tribunal cases to support this argument. The appellant also argued that no separate premium was paid for including family members in the insurance policy, contrary to the denial of credit by the authorities. On the other hand, the Ld. AR argued that no evidence was presented to establish that no additional premium was paid for family members' coverage.

Upon hearing both sides and examining the records, it was observed that service tax paid on the premium for group insurance policies for employees/workmen is eligible due to the mandatory requirement of Labour Laws. However, the eligibility of premium paid for coverage extended to family members depended on whether a separate premium was required for their inclusion. As the records did not clarify this aspect, the matter was remanded to the adjudicating authority for verification. Additionally, the eligibility of premium paid for employees stationed in Chennai but working in Vadodara was also questioned, necessitating further verification. Consequently, the appeal was allowed by way of remand to ascertain the facts regarding separate premium for family members and the eligibility of employees in Chennai for group insurance policy at their factory.