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TMI Blog2024 (1) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... STAN ZINC LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, JAIPUR [ 2014 (7) TMI 485 - CESTAT NEW DELHI] where it was held that Group insurance of the employees against accident or sickness is the requirement of Section 38 of the Employees State Insurance Act, 1948, which a manufacturer has to comply with and accordingly, this service would have to be treated as a service used in or in relation to the manufacture of final products whether directly or indirectly, as a manufacturer would not be allowed to carry on manufacturing operations unless he complies with the requirements of Section 38 of the Employees State Insurance Act, 1948. From the above judgments it can be seen that in many cases the identical issue has been considered and it has been consistently held that the service tax paid on the general insurance service is admissible as cenvat credit as the service is directly or indirectly related to manufacture of the final product in the appellant's factory. Accordingly, the issue is no longer res integra. The demand is not sustainable - Therefore the impugned order is set aside - Appeal is allowed. - HON'BLE MEMBER ( JUDICIAL ) , MR. RAMESH NAIR And HON'BLE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of fact inavailment of credit. 3. Shri S.S. Vikat, Learned Assistant Commissioner (AR) appearing on behalf of the revenue reiterates the finding of impugned order. 4. We have carefully considered the submission made by both sides and perused the records. We find that the cenvat credit on general insurance service availed by the manufacturing unit has been considered time and again in various judgments. Some of the judgments are reproduced below:- CCE Bangalore vs Millopore India Private Limited 2012 (26) STR 514 (Kar.) 6. Therefore, it is clear that those factors have to be taken into consideration while fixing the costs of the final products. If services tax is paid in respect of any of those services which forms part of the costs of the final products centainly the assessee would be entitled to the cenvat credit of the tax so paid. 7. That apart, the definition of input services is too broad. It is an inclusive definition. What is contained in the definition is only illustrative in nature. Activities relating to business and any services rendered in connection there- with, would form part of the input services. The medical benefit extended to the employees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and outward transportation upon the place of removal; With effect from 1-4-2011, the definition of input service was amended and the amended definition is as under :- 2(l) input service means any service - (i) used by a provider of taxable service for providing an output service; or (ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes services used in relation to 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, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal service, inward transportation of inputs or capital goods and outward transportation upto the place of removal; but excludes services :- (A) specified in sub-clauses (p), (zn), (zzl), (zzm), (zzq), (zzzh) and (zzzza) of clause (105) of Section 65 of the Finance Act (hereinafter referred as specified services), in so far as they are used fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of final product are not eligible for Cenvat credit, we find that this finding of the Commissioner is contrary to the law laid down by the Hon ble Bombay High Court in the case of CCE v. Ultra Tech Cement (supra), wherein the Hon ble Bombay High Court while considering the eligibility of outdoor catering service for Cenvat credit, has in para 28, 29 and 30 held that - (a) the definition of input service is very vide and covers not only the services which are used directly or indirectly in or in relation to the manufacture of final products but also includes various services used in relation to the business of manufacture of final products, be it prior to manufacture of final products or after the manufacture of final products - to put it differently, the definition of input service is not restricted to services used in or in relation to the manufacture of final products but extends to all services used in relation to the business of manufacture of final product; (b) the expression activities relating to business in the definition of input service postulates activities which are integrally connected with the business of assessee and if an activity is not integra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... insurance of cash in transit, laptop, etc. have to be treated as an activity related to the business and would be eligible for Cenvat credit. Dharti Dredging Infrastructure Ltd. 2022 (59) GSTL 171 (Tri. Hyd.) 23. From the above, we find that he present case is identical to the case of Ganesan Builders decided by the Hon ble High Court of Madras inasmuch the policy in question pertains to the workmen compensation scheme. The insured, as can be seen from the insurance policies is the assessee/appellant and not the individual employees. In other words, the benefit of the policy, if any, goes to the assessee and not to the individual employees. It is not like health insurance taken for the benefit of employees. We find from the Workmen's Compensation Act, 1923 that Section 3 places the liability for compensation upon the employer. Section 4 determines the amount of compensation to be paid. If the assessee had not taken this insurance policy the employees would still be eligible for full compensation as per Sections 3 and 4 of the Workmen's Compensation Act, 1923. What is sought to be covered by these insurance policies in the present case is the liability of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss and until a business is safeguarded against risk and losses it cannot work continuously. Moreover we find that in the Appellant s own case the Tribunal vide Order dt. A/10371-10373/2017 dt. 20.01.2017 has allowed the credit on advertising agency service, insurance auxiliary service, air travel agent service, cable operator, clearing and forwarding agent services etc. by relying upon Appellant s own case as reported in 2016 (45) STR 383. The Tribunal in case held that the services used in relation to business activity would merit consideration as Input Service . We find that in case of Anglo French Drugs industries 2017 (3) GSTL 147 (TRI), the credit on impugned services were allowed by the Tribunal. In the Appellant s own case as reported in 2018 (15) G.S.T.L 366 (TRI), the Tribunal, on being satisfied that the cost of service is included in cost of production, has allowed the credit. The relevant paras of the findings are as under : 9. This is 2nd round of litigation. The dispute is regarding the eligibility to avail Cenvat credit on the Service Tax paid by various service providers who are insurance Companies. The insurance policies are taken by the respondent-assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this factual matrix, we find that the findings as recorded by the adjudicating authority are in consonance of the law as has been settled by this Bench in the respondent assessee s similar case. The factual findings of the adjudicating authority that the cost of the insurance as indicated in the valuation of the final products remain undisputed. We find that this Bench in the respondent assessee s own case by order dated 15-10-2015 has relied upon various judgments of the Hon ble High Court of Bombay, and held that when the cost of any service is included to determine the valuation of the final product, Cenvat credit cannot be denied of such tax paid on the services. We do not find any reason to deviate from such a view already taken. 9.2 We also find that our earlier order dated 3-3-2014 has been accepted by the department as recorded in order-in-original, if that be so, in the absence of any contest to the option chosen by the adjudicating authority on the direction of Tribunal, in our considered view, cannot be contested now by the Revenue. 10. In view of the foregoing, we find that the impugned orders are correct and legal and do not suffer from any infirmity. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the credit taken by the appellant on these various services. Accordingly, we remand the case back to the adjudicating authority for de novo consideration. 9.1 It can be seen from the above reproduced paragraph that we had directed the adjudicating authority either to consider the Cost Accountant s certificates furnished by the assessee are to undertake special audit in terms of Central Excise Act, 1944. The adjudicating authority has exercised his option of accepting the Cost Accountant s certificates as furnished by the assessee and satisfied himself as to the fact that the value of the insurance cost has been included in the pricing of the final product. It is also recorded by the adjudicating authority that the order of the Tribunal is accepted by Revenue. On this factual matrix, we find that the findings as recorded by the adjudicating authority are in consonance of the law as has been settled by this Bench in the respondent-assessee s similar case. The factual findings of the adjudicating authority that the cost of the insurance as indicated in the valuation of the final products remain undisputed. We find that this Bench in the respondent-assessee s own case by order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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