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2023 (2) TMI 732 - AT - Service TaxRecovery of CENVAT credit availed between 2006- 07 and 2010-11 - medi-claim premium paid for procurement of insurance service (of family members of employees) - single premium and not floater policy - HELD THAT - On scrutiny of the rival submissions, it is seen that reliance has been placed by both sides on decisions arising from dispute on availment of CENVAT credit by central excise assessees. There is a substantial difference between the entitlement for availment of CENVAT credit for those entities in contradistinction with the entitlement of service tax assessees. It is on the claim of entitlement, arising from direct or indirect use in manufacture and certain related services deployed in particular contexts, that these decisions had been rendered. Rule 2 of CENVAT Credit Rules, 2004 factors both the provider and the service; for manufacturers, the sole factor is association with manufacturing process. Accordingly, the issue for consideration is utilization of impugned input service by a provider for rendering output service to a recipient. The decision in EMERSON EXPORT ENGINEERING CENTRE VERSUS COMMISSIONER OF CENTRAL EXCISE 2016 (9) TMI 1134 - CESTAT MUMBAI , emanating from conceding ineligibility for CENVAT credit, does not offer precedent. The impugned order is set aside - appeal is allowed by way of remand to the original authority for re-determination of the credit disallowed in the impugned order.
Issues:
1. Recovery of CENVAT credit availed on medi-claim premium. 2. Eligibility of medi-claim premium as 'input service' under CENVAT Credit Rules, 2004. 3. Denial of credit for policies covering family members and dependents. 4. Interpretation of judicial precedents in favor of the appellant. 5. Nexus requirement for availing CENVAT credit. 6. Applicability of decisions by the Tribunal and High Court. Analysis: 1. The primary issue in this case revolves around the recovery of CENVAT credit availed by M/s Reliance Corporate IT Park Ltd on medi-claim premium paid for procurement of 'insurance service' between 2006-07 and 2010-11. The original authority upheld the recovery, leading to an appeal by the appellant against the decision. 2. The appellant was issued a notice for the recovery of credit availed under rule 14 of CENVAT Credit Rules, 2004, amounting to Rs. 27,94,999. The dispute centered around whether the coverage of family members and dependents under the medi-claim policies qualified as 'input services' under the said rules. 3. The order of the first appellate authority denied credit for policies covering family members and dependents, citing that no service was provided to the appellant by the family members of employees. The appellant contested this denial, arguing that the coverage was offered for a single premium and relied on relevant judicial precedents to support their claim. 4. The appellant contended that denial of credit for policies covering dependents and 'floater policies' was inappropriate, citing decisions by the Tribunal in similar cases. They argued that the decisions supported their claim for availing CENVAT credit on the disputed premium amounts. 5. The issue of nexus with output/output service emerged, with both sides relying on decisions concerning CENVAT credit by central excise assessees. The appellant argued for entitlement based on the utilization of the impugned 'input service' for rendering 'output service' to a recipient, while the authorized representative emphasized the nexus requirement based on previous judicial decisions. 6. The Tribunal analyzed various decisions cited by both parties, including those related to the eligibility of tax paid on insurance premium as CENVAT credit. The Tribunal found discrepancies in the lower authorities' handling of the case and remanded the matter for fresh determination based on the relevant precedents cited in the appeal. In conclusion, the Tribunal set aside the impugned order and remanded the case to the original authority for re-determination of the credit disallowed, emphasizing the need to apply the decisions cited in the appeal for a fair resolution of the dispute.
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