2019 (7) TMI 279 - HC - Central Excise

CENVAT Credit - input services - insurance policy - admissibility of when the policy covers the employees and family members of the employees - HELD THAT - The issue decided in the case of THE COMMISSIONER OF CGST CENTRAL EXCISE NAVI MUMBAI COMMISSIONERATE VERSUS TOYO ENGINEERING INDIA LTD. 2019 (6) TMI 1144 - BOMBAY HIGH COURT where it was held that credit is allowed. Appeal dismissed - decided against Revenue.

Summary

Issues:
Challenge to order of Customs, Excise and Service Tax Appellate Tribunal allowing respondent's appeal | Entitlement to Cenvat credit on service tax paid on insurance policy for employees and family members | Applicability of Cenvat Credit Rules, 2004 | Interpretation of inputs under Cenvat Rules | Admissibility of Cenvat credit on insurance premium for mediclaim policies | Substantial question of law regarding Cenvat credit on insurance policy for employees

Issue 1: Challenge to Tribunal's Order
The appeal under section 83 of the Finance Act, 1994 challenges the order passed by the Customs, Excise and Service Tax Appellate Tribunal (Tribunal) on 15th May, 2018, which allowed the respondent's appeal based on a previous order dated 23rd March, 2018 on an identical issue.

Issue 2: Entitlement to Cenvat Credit
A show-cause notice issued to the respondent alleged that the mediclaim policy taken for employees and family members did not entitle them to Cenvat credit under the Cenvat Credit Rules, 2004. The respondent argued that the mediclaim policy for employees satisfied the test of inputs as defined in the Cenvat Rules, thus justifying the input credit.

Issue 3: Interpretation of Inputs
The original adjudicating authority held that the respondent was not entitled to Cenvat credit on the service tax paid for the mediclaim policy taken for employees. The Tribunal, however, allowed the appeal, stating that until March 2011, the respondent was entitled to Cenvat credit based on the definition of inputs under the Cenvat Rules during that period.

Issue 4: Substantial Question of Law
The Revenue appealed to the High Court, questioning the justification of holding Cenvat credit on service tax paid on insurance policy for employees. The High Court noted that this question had already been addressed in a previous decision, Commissioner of Central Excise Vs. Axis Bank Ltd., where it was concluded in favor of the respondent. Therefore, the High Court dismissed the appeal, stating that the issue was not entertained as it did not give rise to any substantial question of law.

In summary, the High Court dismissed the appeal challenging the Tribunal's order, emphasizing the entitlement to Cenvat credit on the service tax paid for the mediclaim policy taken for employees. The High Court relied on previous decisions to conclude that the issue had already been settled in favor of the respondent, thus not warranting further consideration.