2019 (2) TMI 1244 - AT - Service Tax

CENVAT Credit - input services - Overseas Mediclaim Insurance Policy for employees who were sent for undertaking works in their project abroad - Held that - The definition of input service with effect from 01.04.2011 excludes life and health insurance services availed for personal use or for personal consumption of employees - The definition of input service with effect from 01.04.2011 excludes life and health insurance services availed for personal use or for personal consumption of employees The Hon ble jurisdictional High Court in the case of M/s. Ganesan Builders Ltd., 2018 (10) TMI 269 - MADRAS HIGH COURT has analysed the very same issue with regard to the definition of input service , after 01.04.2011 and held that credit on such insurance services is eligible. - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Eligibility of credit availed on insurance services for employees sent abroad for project works.

Analysis:
The case involved a dispute regarding the eligibility of credit on insurance services availed by the appellants for their employees sent abroad for project works. The department had issued a show-cause notice proposing to disallow the credit on the grounds that these services were excluded from the definition of "Input Services." The original authority disallowed the credit, and the Commissioner (Appeals) upheld the decision, leading to the current appeal.

The appellant's counsel argued that the insurance policies were taken in the name of employees deputed for works abroad, not for personal use or consumption. These policies were mandated by labor legislations to cover the risk of injuries or untoward incidents at the place of employment. The counsel cited a relevant decision to support their argument.

The Authorized Representative supported the findings in the impugned order, leading to a hearing where both sides presented their case. The crucial issue was whether the appellants were eligible for the credit availed on insurance services. The definition of "input service" excluded life and health insurance services for personal use or consumption of employees. However, the appellants clarified that the insurance policies were for covering the risk of employees working on projects abroad, as mandated by labor laws.

The Tribunal, after considering the arguments and a relevant decision by the jurisdictional High Court, held that credit on such insurance services was indeed eligible. Citing the previous case law, the Tribunal set aside the impugned order, allowing the appeal with consequential reliefs, if any. The judgment clarified the eligibility of credit on insurance services for employees sent abroad for project works, emphasizing compliance with labor legislations and the definition of "input service."