2019 (6) TMI 1144 - HC - Central Excise

CENVAT Credit - input services - insurance policy when the policy covers the employees and family members of the employees - Scope of SCN - HELD THAT - The impugned order of the Tribunal on facts was not called upon to deal with the issue of taking of Cenvat credit of service tax paid on insurance policy for the family members of the employees. In fact, the Commissioner Service Tax who passed the order in original dated 17th September, 2014 after considering the show-cause notice and the respondent's reply to the same, renders a finding of fact that respondent is taking Cenvat credit of service tax paid on insurance policy covering the health of its employees. The Revenue accepted this finding of fact. This is evident as it neither had filed any appeal nor did they filed any cross-objection to the appeal filed by the respondent. Whether under the facts and circumstances of the case, was it justified to hold that Cenvat Credit of service tax paid on insurance policy is admissible when the policy covers the employees? - HELD THAT - The aforesaid question which arises from the order of the Tribunal does not give rise to any substantial question of law as the issue stands concluded in favour of the respondent assessee and against the Revenue by the decision of this Court in THE COMMISSIONER OF CENTRAL TAX CENTRAL EXCISE, MUMBAI CENTRAL COMMISSIONERATE VERSUS AXIX BANK LTD., (AXIS) 2018 (12) TMI 1479 - BOMBAY HIGH COURT - the question as arises from the impugned order of the Tribunal does not give rise to any substantial question of law. Thus, not entertained. Appeal dismissed.

Summary

Issues:
Challenge to order passed by Customs, Excise and Service Tax Appellate Tribunal regarding admissibility of Cenvat credit on service tax paid on insurance policy for employees.

Analysis:

1. Issue of Cenvat Credit Eligibility: The appeal challenged the Tribunal's order allowing Cenvat credit on service tax paid for insurance policies for employees. The Revenue questioned if it was justified to grant Cenvat credit for insurance policies covering employees and their family members. A show-cause notice was issued alleging inadmissibility of Cenvat credit on medical insurance policy for employees and their family members. The respondent contended that the mediclaim policy was for employees only, meeting the criteria for input credit under the Cenvat Rules.

2. Adjudication by Commissioner: The Commissioner - Service Tax held that the respondent was not entitled to Cenvat credit for service tax paid on the mediclaim policy premium for employees. The respondent appealed to the Tribunal against this decision. The Tribunal, in its order, allowed the appeal stating that Cenvat credit was admissible for the period up to March 2011 based on the definition of inputs under the Cenvat Rules until that date.

3. Judicial Review: The High Court observed that the Revenue's proposed question did not align with the issue addressed by the Tribunal's order. The Tribunal focused on the appeal regarding Cenvat credit disallowance for insurance policies for employees, not their family members. The Court noted that the Revenue had accepted the fact that the respondent was availing Cenvat credit for insurance policies covering employees' health, as evidenced by no appeal or cross-objection filed.

4. Precedent and Dismissal: The Court found that the question raised did not present any substantial legal issue, citing a previous decision in Commissioner of Central Excise Vs. Axis Bank Ltd. where a similar matter was resolved. As the issue was settled in favor of the respondent, the Court dismissed the appeal, concluding that the question did not warrant further consideration.

In conclusion, the High Court upheld the Tribunal's decision to allow Cenvat credit on service tax paid for insurance policies covering employees, dismissing the Revenue's appeal based on the settled legal position established in a previous case.