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TMI Blog2019 (6) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... ue involved in the present case relates to interpretation of the definition of input service and therefore the imposition of penalty of ₹ 83,000/- under Rule 15(1) of the Cenvat Credit Rules is not justified - Penalty set aside. Demand upheld - penalty set aside - appeal allowed in part. - E/21539/2018-SM - Final Order No. 20447/2019 - Dated:- 31-5-2019 - SHRI S.S GARG, JUDICIAL MEMBER Mr. Prateek, CA For the Appellant Mrs. Kavita Podwal, Superintendent (AR) For the Respondent ORDER Per: S.S GARG The present appeal is directed against the impugned order dated 20.07.2018 passed by the Commissioner (Appeals) whereby the Commissioner (Appeals) has partially allowed the appeal of the appellant and disallowed the credit of ₹ 8,26,000/- (Rupees Eight Lakhs Twenty Six Thousand only) and ₹ 11,191/- (Rupees Eleven Thousand One Hundred and Ninety One only) under Rule 14 of Cenvat Credit Rules read with Section 11A of the Central Excise Act and also reduced penalty from ₹ 96,000/- (Rupees Ninety Six Thousand only) to ₹ 83,000/- (Rupees Eighty Three Thous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Property and Assets Policy, other Property Insurance and Membership and Training charges but denied the cenvat credit on Medi-claim Policy for employees amounting to ₹ 8,26,000/- (Rupees Eight Lakhs Twenty Six Thousand only) and Group Personal Accident Insurance Policy amounting to ₹ 11,191/- (Rupees Eleven Thousand One Hundred and Ninety One only). Aggrieved by the denial of cenvat credit to the extent of ₹ 8,37,191/- (Rupees Eight Lakhs Thirty Seven Thousand One Hundred and Ninety One only) and the imposition of penalty of ₹ 83,000/- (Rupees Eighty Three Thousand only), appellants have filed the present appeal. 2. Heard both the parties and perused the records. 3. Learned consultant appearing for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without properly appreciating the definition of input service and the exclusion clause provided in Rule 2(l)(C). He further submitted that the Medi-claim and Group Accident Policy is not primarily for personal consumption of the employees and it is indirectly related to manufacture of final product. He further submitted that it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces and GTA Services and the policies taken under the Workmen s Compensation Act specified the area, where construction work was being carried on and the object of the said policy was to protect the employees/workmen in the unorganized sector as observed by the Hon ble High Court in that case. She further submitted that the exclusion clause as contained in Rule 2(l)(C) has been examined by the Larger Bench in the case of Wipro Ltd. Vs. CCE, Bangalore-III reported in 2018 (363) E.L.T. 1111 wherein the Tribunal after considering the exclusion clause provided in Clause (C) w.e.f. 01.04.2011 has held that Outdoor Catering Service is not eligible for input service credit post amendment dated 01.04.2011. 5. After considering the submissions of both the parties and perusal of the material on record, I find that the only issue involved in the present case is whether the appellant is entitled to avail cenvat credit on input services relating to Medi-claim Policy for employees and Group Personal Accident Insurance Policy. In order to decide this issue, it is necessary to note the definition of input service before 01.04.2011 and after 01.04.2011. Post 1- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee; Prior to 1-4-2011, the definition of (input service stood thus : Rule 2(1) input service means any service, - (i) used by a provider of taxable service for providing an output service, or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal, and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage up to the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation up to the place of removal. 5.1. Further I find t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, once such services are excluded, whether the employer or employee bears the cost partially or fully, has no bearing on the amendment. Therefore, keeping in view [the] above discussions and the various decisions cited by both the parties, we are of the considered view that the outdoor catering service is not eligible for input service credit post amendment dated 1-4-2011 vide Notification No. 3/2011, dated 1-3-2011. 5.2. Further I find that the decisions relied upon by the appellant are not applicable in the facts and circumstances of this case and they are distinguishable on facts. Further I find that the additional grounds raised by the appellant does not have any force because in the show-cause notice it has been observed that the appellants have wrongly availed cenvat credit amounting to ₹ 10,43,351/- (Rupees Ten Lakhs Forty Three Thousand Three Hundred and Fifty One only) being ineligible credit on various input services during the period from January 2016 to March 2017. In view of my discussion above, I am of the considered view that the Larger Bench of the Tribunal in the case of Wipro Ltd. has considered the exclusion clause and has held that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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