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TMI Blog2025 (4) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidered and accordingly, the Registry is directed to incorporate the following changed name and address of the respondent in the appeal records for the purpose of disposal of the appeal:- "Commissioner of Central Goods Service Tax & Central Excise, Navi Mumbai Commissionerate, 16th Floor, Satra Plaza, Sector -19D, Palm Beach Road, Vashi, Navi Mumbai - 400 705". 3.1 Denial of CENVAT Credit of Service Tax paid on health/medical insurance of employees, their dependents, retired employees, CISF security, and taking of CENVAT credit on the basis of documents which are not proper is the subject matter of present dispute. During EA-2000 audit conducted by the department in November, December 2013 and January, 2014, they had examined the records maintained by the appellants, on the basis of which CENVAT credit of service tax has been taken. The department had objected to CENVAT credit taken on certain services on the ground that these do not appear to be covered by the definition of 'input service' under Rule 2(l) of the CENVAT Credit Rules, 2004 (CCR of 2004). 3.2 Accordingly, show cause proceedings were initiated for recovery of CENVAT credit alleged to have been taken irregularly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finery campus are being employed as per the mandatory instructions of the Ministry of Home Affairs, and in as much as the definition of input service include services used in relation to 'security', the service tax paid on health, medical insurance services of security should be admissible to them as eligible CENVAT credit. He further stated that these statutory requirements are essential services in manufacturing of petroleum products. Hence, he pleaded that the service tax paid on such services should also be available to them. 4.4 In respect of objection to the documentation on the basis of which CENVAT credit was taken, he stated that the appellants had received final invoices issued by New India Assurance Company Limited (NIA). Hence, he stated that use of words indicating 'To whomsoever it may concern' in the provisional premium payment certificates issued initially for the same by NIA, which are used by the appellants for taking CENVAT credit, shall not be regarded as inadmissible documents. On the above basis, he justified that the appellants are eligible for CENVAT credit and claimed that the impugned order is not sustainable to the extent it has denied the credit on medi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of manufacture of petroleum products as the employees and CISF security personnel are essentially required in their manufacturing operations. 8.2 In order to address the above issue of eligibility to avail the Cenvat credit on various input services, we would like to refer the relevant legal provisions contained in Cenvat Credit Rules, 2004as it existed during the disputed period in respect of the taxable service under dispute. "Definitions. 2. In these rules, unless the context otherwise requires,- (l) 'input service' means any service,-- (i) used by a provider of output 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 up to the place of removal, and includes services used in relation to modernisation, 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 upto the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and traini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e covered under the scope of 'input services'. Further, the third category, viz., (iii) 'exclusion' part of the definition provided under Clauses (A), (B), (BA) and (C), specifically provide for certain services or portion of such services, which are not included in the above definition of 'input service'. However, there are certain exceptions to this exclusion which are also given in the form of 'except for provision of certain services', 'except when used by certain category of persons', 'when such services are not primarily used for specified use' etc. Therefore, we are of the considered view that in order to come to the conclusion that a particular service is covered as 'input service', either it could be covered under category (i) or (ii) of the definition of input service as explained above, and such input service should not fall under the exclusion clauses mentioned in the third category (iii) above. 9.1 In respect of group medical/health insurance policy taken for their employees, we find that the technicians of prescribed threshold limit of wages/salary, who are required to work in the refinery, were required to be insured in terms of Section 38 of Employees' State Insura ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otetsu India (P) Ltd. - 2011 (23) S.T.R. 444 (Kar.) wherein the Hon'ble High Court has observed as follows : - 14. In so far as Insurance coverage to the employees is concerned in the course of employment if the employees suffer injury or dies, there is a vicarious liability imposed on the employer to compensate the employee. If the employer employs its own transportation facility in order to cover the risk which also includes the risk of workers who are covered in that statutory establishment. He has to take the insurance policy without which the vehicle cannot go on the road. Under the Workmen's Compensation Act he has to obtain the Insurance Policy covering the risk of the employees. The Employees' State Insurance Act takes care of the health of the employees also and casts an obligation on the employer to provide insurance services. Under these circumstances, this Group Insurance Health Policy though is also a welfare measure is an obligation which is cast under the Statute that the employer has to obey. Section 38 of the Employees' State Insurance Act, 1948, mandates that subject to the provisions of the Act, all employees in factories or establishments to which this Act app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce in the case of Stanzen Toyotetsu India Pvt. Ltd. v. CCE, Bangalore-III reported in 2009 (14) S.T.R. 316 (Tri.-Bang.) held that the assessees are entitled to avail Cenvat credit of the service tax paid on Group Mediclaim Policy premium. Hence, the present appeal by the Revenue. 3. The question for consideration therefore is as to whether the assessees are liable to avail Cenvat credit towards payment of service tax on the Group Insurance Health policy. An identical question came up for consideration before the Division Bench in CEA 96/2009 and connected matters which were disposed off on 8-4-2011. The question considered therein was as to whether the assessees are entitled to claim Cenvat credit for the service tax paid on Insurance/Health Insurance policy. The Division Bench held that in so far as Insurance coverage to the employees is concerned in the course of employment if the employees suffer injury or dies, there is a vicarious liability imposed on the employer to compensate the employee. If the employer employs its own transportation facility in order to cover the risk which also includes the risk of workers who are covered in that statutory establishment, he has to tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissed in view of the aforesaid reasons." 9.4 In respect of security services provided by CISF, we find that the CISF has been tasked with providing security to all petroleum & oil refineries, recognizing their strategic importance and the need for robust security measures including fire safety, counter terrorist attack etc., As such security services have become mandatory, the health/medical insurance incurred in connection with such security staff shall also be considered as integral part of the security services which are essential 'input service' required to be used in manufacture of petroleum products. Further, 'security' services have also been specifically provided in the inclusive part of the definition of 'input service' under Rule 2(l) ibid. Therefore, we find that Service Tax paid on medical/health insurance services for CISF Security as discussed above are eligible to be availed of as CENVAT credit. 9.5 Accordingly, we hold that Service Tax paid on medical/health insurance services for an amount of Rs.2,04,63,415/- as discussed above are eligible for availing CENVAT credit as per statutory provisions discussed under paragraphs 8.2, 8.3 & 9.1 above and as per the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vy of any interest on the above disputed amount, which have been confirmed as part of the adjudged demands in the impugned order. 11. Further, from the facts of the case it also transpires that for the period from April, 2011 to March, 2014, two SCNs have been issued for denial of CENVAT credit, first one dated 07.11.2014 covering the period October, 2013 to March, 2014 and the second one dated 29.10.2015 covering 2011- 2012 and 2012-2013. The grounds for denial of CENVAT credit on health/ medical insurance service is common in both SCNs. In such a factual position, it is not feasible to invoke extended period of time for demand of CENVAT credit as done in this case, under the pretext 'that it was not possible to detect the wrong availment of Cenvat credit by the assessee, had the same not been categorically enquired by the Audit party'. It is also factually incorrect, as for the same input service CENVAT credit has been denied in the SCN dated 07.11.2014 for the same assessee-appellants. 12. We also find that the Hon'ble Supreme Court in the case of Bharat Petroleum Corporation Limited Vs. Commissioner of Central Excise, Nashik Commissionerate - (2025) 26 Centax 344 (S.C.) have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was fixed as per the directives of the Central Government. We have also carefully perused the order passed by the Commissioner on the show cause notice. Even in the order, no specific reference has been made to any such contention raised by BPCL or other OMCs. Even the order also refers to statements of the officers of BPCL and other OMCs. Hence, both the grounds in support of invoking an extended period of limitation cannot be sustained, and only on that ground, the demand cannot be sustained. 36. In this case, there is no allegation made by the Revenue of fraud, collusion or any wilful mis-statement on the part of the appellant. The stand taken is that the MOU was suppressed, and therefore, Section 11AC will apply. In view of the findings recorded above on the issue of the invocation of the extended period of limitation, the penalty could not have been imposed. 38. Therefore, the said appeal preferred by the BPCL deserves to be allowed by setting aside the entire demand on the ground that the extended period of limitation could not be invoked." 13. In view of the foregoing, we are of the considered view that the impugned order is liable to be set aside partly, to the extent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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