2018 (5) TMI 302 - AT - Central Excise

CENVAT credit - input services - insurance services of employees - Man Power Recruitment Services for Assistant Pharmacist / Nursing Assistant - Held that - The period involved is prior to 1.4.2011. The services of general insurance have been excluded from input services after 1.4.2011. The same would be eligible, in case the appellant is able to establish that these services availed for the employees of the factory - Further, if the appellants have availed credit on service tax paid in respect of employees of other units, they are not eligible for credit - These aspects have to be examined - matter remanded to the adjudicating authority for verification and reconsideration whether the appellant is eligible for credit on the said services. CENVAT credit - Man Power Recruitment Services - Held that - Section 45 of the Factories Act, 1948 mandates for employing a person holding a certificate in the first aid treatment and for providing necessary medical facilities in the factory. Therefore, the said services are integrally connected to the manufacturing activity of the appellant and qualifies as input service - services eligible for credit. Appeal allowed in part and part matter on remand.

Summary

Issues involved:
- Eligibility of insurance services for credit
- Eligibility of Man Power Recruitment Services for credit

Eligibility of insurance services for credit:
The case involved the appellant availing cenvat credit on insurance services for employees and their dependents. The dispute arose regarding the admissibility of credit on insurance services under the Central Excise rules. The appellant argued that the insurance services were essential to cover the risk of employees, as mandated by labor laws. However, the respondent contended that the credit was not admissible for insurance services covering not only employees but also their dependents and employees of other units. The Tribunal noted that general insurance services were eligible for credit before 1.4.2011, provided they were exclusively for employees. The Tribunal directed a remand to the adjudicating authority to verify if the premium remained constant and if credit was availed for employees of other units, to determine the eligibility of the appellant for credit on these services.

Eligibility of Man Power Recruitment Services for credit:
The second issue revolved around the eligibility of Man Power Recruitment Services, particularly for recruiting an Assistant Pharmacist, for cenvat credit. The appellant argued that these services were essential for providing first aid treatment to employees in emergencies, as required by the Factories Act, 1948. The respondent contended that these services lacked a nexus with the manufacturing activity. The Tribunal analyzed Section 45 of the Factories Act, 1948, which mandates employing individuals certified in first aid treatment and providing medical facilities in the factory. The Tribunal held that these services were integrally connected to the manufacturing activity and qualified as 'input services.' Consequently, the Tribunal deemed these services eligible for credit.

In conclusion, the Tribunal partly set aside the impugned order, allowing credit on nursing assistance services and remanding the issue of insurance services' eligibility for further verification. The appeal was partly allowed based on the above terms, with any consequential relief to be granted as per the law.