2016 (4) TMI 238 - AT - Service Tax

Admissibility of Cenvat Credit - Medicare Services Club for its employees - Whether expenditure incurred on account of Medicare services is included in the cost of services as per CAS-4 or not - Held that - the First Appellate Authority while rejecting Appeal of the Appellant, only gave one reason for denying the Cenvat Credit that there was no evidence produced by the Appellant whether expenses on account of Medicare Services have been included in the value of the services being provided by the Appellant. The Appellant has now produced a certificate from the Chartered Accountant to that effect that the expenses incurred on account of Medicare services have been included in the value of the output services being provided. Therefore, Cenvat credit has to be allowed. - Decided in favour of appellant

Summary

Issues involved:
- Admissibility of Cenvat Credit for Medicare Services availed by the Appellant.
- Requirement of statutory or legal obligation for providing medical facilities to employees.
- Interpretation of relevant case laws to determine admissibility of Cenvat Credit.

Analysis:

Issue 1: Admissibility of Cenvat Credit for Medicare Services
The Appellant filed an Appeal against the rejection of their claim for Cenvat Credit on Medicare Services for employees. The Appellant argued that the expenses incurred on Medicare services were included in the value of output services, justifying the Cenvat Credit availed. The Appellant relied on case laws to support their claim, emphasizing similar credits allowed to other Appellants in the past.

Issue 2: Requirement of Statutory or Legal Obligation
The Revenue contended that the Appellant failed to establish any statutory or legal obligation necessitating the provision of medical facilities to employees. It was argued that the case laws cited by the Appellant were specific to situations where such facilities were mandated by law, which was not the case in the present proceedings.

Issue 3: Interpretation of Case Laws
The Tribunal analyzed the case laws cited by both parties to determine the admissibility of Cenvat Credit for medical services. References were made to judgments highlighting the obligation on employers to provide insurance services and health coverage to employees under statutory provisions. The Tribunal emphasized the nexus between the insurance premiums paid and fulfilling legal obligations, concluding that such expenses were indeed related to business activities.

Conclusion:
After considering the arguments, case laws, and evidence presented, the Tribunal observed that the Appellant had now produced a certificate from a Chartered Accountant confirming the inclusion of Medicare service expenses in the value of output services. Citing settled legal principles and the evidence provided, the Tribunal allowed the Appeal filed by the Appellant, thereby granting them the admissibility of Cenvat Credit for the Medicare Services.