2021 (4) TMI 735 - AT - Central Excise

CENVAT Credit - input services - Group Insurance Services for insurance of staff - rejection of credit on the ground that the input services were not used either in or in relation to the manufacture of final product and it is not covered under inclusion category of input services and it fall in the exclusion category provided from 01/04/2011 - HELD THAT - The very same issue even for the period post amendment in Rule 2(l) of Cenvat Credit Rules, whereby certain services were excluded from the ambit of input services has been considered by the Hon ble Madras High Court in the case of M/S. GANESAN BUILDERS LTD. VERSUS THE COMMISSIONER OF SERVICE TAX 2018 (10) TMI 269 - MADRAS HIGH COURT wherein after interpreting the term Group Insurance with the exclusion clause held that the group insurance service is admissible input service and credit was allowed. From the judgment it can be seen that identical issue has been considered by the Hon ble Madras High Court in detail after interpreting the definition of input services and also the inclusion clause. Therefore, there is nothing more to add after the aforesaid judgment was passed. Group Insurance Service is admissible for Cenvat Credit - appeal allowed - decided in favor of appellant.

Summary

Issues involved: Whether the appellant is entitled to Cenvat Credit for Group Insurance Services for staff insurance.

Analysis:
1. The appellant was denied Cenvat Credit by the adjudicating authority and Commissioner (A) on the grounds that the input services were not used in or in relation to the manufacture of the final product and were excluded from the inclusion category post 01/04/2011.

2. The appellant argued that the Group Insurance Policy for employees was mandatory under the statute, not optional, and related to overall business activity. The appellant cited judgments where Cenvat Credit for Group Insurance Services was allowed even post 01/04/2011, emphasizing that Group Insurance did not fall under the exclusion category.

3. The Revenue reiterated the findings of the impugned order and submitted judgments to support their stance.

4. The Tribunal considered a similar issue post-amendment in Rule 2(l) of Cenvat Credit Rules and referred to a judgment by the Hon'ble Madras High Court where Group Insurance Service was deemed admissible for Cenvat Credit. The Tribunal highlighted the statutory requirement aspect and the protection of employees under the policy, ultimately allowing the appeal and setting aside the impugned order.

5. The Tribunal concluded that Group Insurance Service is admissible for Cenvat Credit based on the interpretation of input services and inclusion clause, aligning with the judgment of the Hon'ble Madras High Court. The appeal was allowed, and the impugned order was set aside.

6. The judgment emphasized the statutory nature of the Group Insurance Service, its purpose to protect employees, and the interpretation of relevant laws in allowing Cenvat Credit for such services.

7. The decision provided a detailed analysis of the statutory requirements, beneficiary aspects, and the protection offered by Group Insurance Services, ultimately leading to the allowance of Cenvat Credit for the appellant.