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TMI Blog2018 (7) TMI 842X X X X Extracts X X X X X X X X Extracts X X X X ..... l be covered by the definition of “input services” as amended from 2011. Adjudicating authority has analyzed the various provisions of the policy to determine whether the policy is primarily for personal consumption of employees or otherwise and has concluded that the said policy is for the personal consumption of employee - when both Adjudicating Authority and Commissioner (Appeal) have arrived at common finding of the fact that the insurance policies under consideration are primarily meant for personal consumption of the employees, there is no reason to differ with the said finding of fact. Further in terms of the language of Rule 2(l) once a finding of fact is arrived that the insurance policy is primarily for the personal consumption of the employee than the said policy shall go out in totality from the definition of the input service and there can be no justification for artificial bifurcation of the policy and allow the credit in respect of that part of the policy which is not for the personal consumption of the employee. Since the insurance services in the present case are primarily meant for the personal consumption of the employees hence they do not qualify to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r its employee for medical claim, personal and vehicle insurance from M/s National Insurance Company Limited and was paying the premium against the said policies and received invoices/ policy documents showing the amount of premium and service tax paid. Appellant has taken the credit of the Service Tax so paid. Since the said services have not been used for personal consumption of employee s the same would not fall within the exclusion category from the definition of input service under CENVAT Credit Rules, 2004. For claiming the credit in respect of group insurance services he relied on the following decisions: i. CCE vs Stanzen Toyotesu Pvt Ltd [2011 (23) STR 444 (Kar)] ii. Honda Motorcycle Scoote (I) Pvt Ltd vs. Commissioner of Central Excise Delhi [2016 (45) STR 397 (Tri)] iii. Hindustan Zinc Limited vs Commissioner of Central Excise Jaipur [2015 (38) STR 608 (T)] iv. Deloitte Support India Ltd Vs Commissioner of Central Excise, Hyderabad [2017 (5) GSTL 393 (Tri)] [upheld by Andhra Pradesh High Court in [2017 (5) GSTL J197 (AP)]] v. Commissioner of Central Excise, Delhi vs Suzuki Motorcycle India Pvt Ltd [2017 (47) STR 85 (Tri)] 4.2 Arguing further Couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy can be termed as policy for consumption of the employee. Accordingly he submitted that the said service shall be hit by the exclusion credit in the definition of the Input Service and hence no CENVART Credit shall be available in respect of the said services. He relied upon the following decisions in his favour: i. SEMCO Electric Pvt Ltd vs Commissioner of Central Excise Pune I [2012 (276) ELT 94 (T)] ii. John Dere India Pvt Ltd. Vs Commissioner of Central Excise Pune III [2016 (41) STR 990 (T)] iii. Infosys Ltd Vs Commissioner of Service Tax, Bangalore [2015 (37) STR 862 (T)] iv. AET Laboratories Pvt Ltd Vs Commissioner Central Excise ST Hyderabad [2016 (42) STR 720 (T)] 5.3 On issue of limitation he relied upon the decision of tribunal in case of NGK Infrastructure Ltd Vs Commissioner of Central Excise Ghaziabad [2016 (41) STR 299 (Tri)] 6.0 The definition of input service as it existed prior to and post amendments made 2011 is reproduced below for ready reference in table 1. Prior to Amendment in 2011 Post Amendments made in 2011 (l) input service means any service,- (i) used by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey relate to a motor vehicle except when used for the provision of taxable services for which the credit on motor vehicle is available as capital goods; or (C) such as those provided in relation to outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee; From the above table it is evident that in view of the amendments made in the definition of input services in the year 2011, the phrase activities relating to business appearing in inclusive part of the definition has been deleted, and an exclusion clause specifying the services that are to be excluded from the definition of the input services has been added. Undisputedly the period under consideration is from July 2014 to October 2015. Hence it is to be examined whether the group insurance services provided by the appellant to his employees and their family member will be covered by the definition of input service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... policy is for the personal consumption of employee. The said para 20 is reproduced below: 20 The various aspects of this policy have been examined to determine that whether the policy is primarily for personal consumption of the employees or not. The following aspects of the policy indicate that the policy is not for the personal use of employees: The fact that the insured s name in the policies is that of the notice Fact that the policy is providing insurance cover for the purpose of Accident, Death and Health which serves to provide risk cover to the notice in case of any unforeseen risk which the employees of notice face during the course of manufacture of final goods Payment aspects of the policy, namely the fact that the Name of policy is routed through the notice. However, the following aspects/ features of the policy are in favour of personal consumption of the employees: Provision of Maternity benefit in the policy which does not appear to be related to manufacture of goods Extension of Insurance benefits to the dependants (Spouse and Children) of the employees (For example in Policy No 271001/46/14/0500000142 ) The above m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 015 (38) STR 608 (T)] Prior to 2011 2017 (5) GSTL 393 (Tri) Prior to 2011 2016 (45) STR 397 (Tri)] Post 2011 Credit allowed holding that it was a legal requirement under ESI Act to provide insurance cover to employees. However as per the definition of input services under Rule 2(l), these services are excluded from definition of input services if meant primarily for personal consumption of employee. In the present case when the finding of fact has been rendered that the insurance services were meant primarily for personal consumption of employees, these decisions are not material and distinguishable. 2017 (47) STR 85 (Tri)] Post 2011 2012 (276) ELT 94 (T) Post 2011 CENVAT credit in all the said cases have been denied in respect of the insurance services on the ground that the said services are not used in or in relation to manufacture of finished products. In cases where the credit has been allowed, the credit in respect of that part of services which is for providin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the family members of employees. Therefore the said decision is not relevant to the facts of this case. Therefore the credit is denied. 12. Thus in view of above discussions since the insurance services in the present case are primarily meant for the personal consumption of the employees hence they do not qualify to be input services under the definition of input services as amended in 2011. Hence credit in respect of the said insurance services is not admissible. 13. Appellant have raised the issue of limitation and have argued that extended period of limitation cannot be invoked in the present case and have relied upon the various decisions mentioned in para 4.2 (supra). Relying on the decision in case of NGK Infrastructure (supra) learned A R argued that extended period has been rightly invoked ion the present case. For invoking of extended period of limitation, it has to be shown that certain material facts were suppressed by the appellant, to claim the benefits that were not due to him. Adjudicating Authority has in para 27 of his order observed as follows: The knowledge of the fact relating to intent of the notice is available only with the notice. Further, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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