2013 (11) TMI 716 - AT - Service Tax

Cenvat credit of service tax by Insurance Company on various insurances Waiver of Pre-deposit Held that - Commissioner of Central Excise & Service Tax V/s Micro Labs Ltd. 2011 (6) TMI 115 - KARNATAKA HIGH COURT - Amount of insurance premium of medical claim policies/accident policies, has been indicated as a package to the employee and in the salary slip, there is no deduction indicated as amount towards insurance premium - merely because these services are not expressly mentioned in the definition of input service it cannot be said that they do not constitute input service and the assessees are not entitled to the benefit of CENVAT credit - the appellant has made out a prima facie case for waiver of pre-deposit of amounts stay granted.

Summary

Issues:
- Waiver of pre-deposit of CENVAT Credit amount
- Eligibility of CENVAT Credit on insurance policies for employees

Waiver of Pre-deposit of CENVAT Credit Amount:
The judgment revolves around a Stay Petition filed seeking waiver of pre-deposit of CENVAT Credit amount confirmed as ineligible by the adjudicating authority, along with interest and penalty. The first appellate authority had upheld this decision. The appellant had availed CENVAT Credit for Service Tax paid by the insurance company on various insurance policies for their employees. The Chartered Accountant cited precedents from the High Court of Karnataka to support the appellant's case, emphasizing that the issue was settled in favor of the assessee. The Departmental Representative defended the order, noting that the appellant debited the amount to the salaries of their employees. The Tribunal examined the records and found that the appellant had indeed taken out insurance policies for their employees and claimed the credit of Service Tax paid to the insurance companies.

Eligibility of CENVAT Credit on Insurance Policies for Employees:
Upon reviewing a salary package for an employee, the Tribunal noted that the insurance premium for medical claim policies and accident policies was included in the package without any deduction indicated in the salary slip. Referring to judgments from the High Court of Karnataka, the Tribunal concluded that the appellant had made a prima facie case for waiver of pre-deposit. Consequently, the Tribunal allowed the application for waiver of pre-deposit of amounts involved and stayed the recovery until the appeal's disposal.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT AHMEDABAD highlights the issues of waiver of pre-deposit of CENVAT Credit amount and the eligibility of CENVAT Credit on insurance policies for employees. The judgment delves into the arguments presented by both sides, the examination of relevant records, and the application of legal precedents to reach a decision in favor of the appellant, granting the waiver of pre-deposit and staying the recovery of the amounts involved pending appeal disposal.