2012 (5) TMI 371 - AT - Service Tax

Whether the group insurance service provided to them under medi-claim policy for the welfare of assessee s employees by the insurer was an input service under Rule 2 (l) of the CENVAT Credit Rules, 2004 for the assesse Held that - After considering the nexus of the service to the business of the assessee, the Bench included the service within the ambit of the inclusive part of the definition of input service and granted the consequential benefit of CENVAT credit to the assessee. assessee s appeal allowed CENVAT Credit on GTA Service - whether GTA Service could be considered as an input service as defined under Rule 2 (l) of the CENVAT Credit Rules, 2004 Held that - in the case of M/s. ABB Ltd. GTA Service is an input service within the statutory definition of this expression. appeal is dismissed

Summary

Issues:
1. Denial of CENVAT Credit for group insurance service.
2. Grant of CENVAT Credit for GTA service.

Analysis:

Issue 1: Denial of CENVAT Credit for group insurance service
The case involved two appeals, one by the assessee and another by the Revenue, regarding the denial of CENVAT Credit for group insurance service while allowing the benefit for GTA service. The assessee argued that the group insurance service for their employees falls under the definition of 'input service' as per Rule 2 of the CENVAT Credit Rules, 2004. They cited previous Tribunal decisions supporting their claim. The Division Bench had previously ruled in favor of the assessee stating that the group insurance service provided for the welfare of the employees was indeed an 'input service' and granted CENVAT credit accordingly. The Revenue did not appeal against this decision, indicating an acceptance of the ruling. Therefore, the Tribunal concluded that the issue was settled in favor of the assessee, and their appeal was allowed.

Issue 2: Grant of CENVAT Credit for GTA service
Regarding the Revenue's appeal challenging the grant of CENVAT Credit for GTA service, it was noted that the assessee had availed GTA service to transport their final products and paid Service Tax on the freight. The question was whether GTA service could be considered an 'input service' under Rule 2 (l) of the CENVAT Credit Rules, 2004. The Tribunal referred to a ruling by the Hon'ble High Court of Karnataka in the case of M/s. ABB Ltd. and others Vs. Commissioner, where it was established that GTA service falls within the statutory definition of 'input service.' As a result, the Tribunal dismissed the Revenue's appeal, upholding the decision that GTA service qualifies for CENVAT Credit. The judgment was pronounced and dictated in Open Court by P G Chacko, J.