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of <h1>Appellate Tribunal upholds Service Tax credit on Mediclaim insurance for workers; underscores nexus to manufacturing.</h1> <h3>CCE Surat Versus M/s Heubach Colour Pvt. Ltd.</h3> The Appellate Tribunal CESTAT AHMEDABAD rejected the Revenue's appeal challenging the allowance of Service Tax paid on Mediclaim insurance of workers. ... CENVAT Credit - Nexus with manufacturing activity - Held that:- Further, subsequently in the case of Ultratech Cement Ltd. [2010 (10) TMI 13 - BOMBAY HIGH COURT], Hon'ble High Court of Bombay after considering the decision of Hon'ble Supreme Court in the case of Maruti Suzuki Ltd. [2009 (8) TMI 14 - SUPREME COURT], has come to the conclusion that while deciding the admissibility of CENVAT Credit of Service Tax paid, the decision of Hon'ble Supreme Court in the case of Maruti Suzuki Ltd. would not be applicable. Further, it was submitted on behalf of the respondent that Hon'ble High Court of Karnataka in the case of CCE Bangalore Vs. Stanzen Toyotetsu India (P) Ltd. [2011 (4) TMI 201 - KARNATAKA HIGH COURT], has held that Group Health Insurance Policy, even though a welfare measure, the Service Tax paid on such service, would be admissible as CENVAT Credit - Decided against Revenue. Issues:- Appeal against the impugned order allowing Service Tax paid on Mediclaim insurance of workers- Nexus of the service to the manufacture- Applicability of previous judgments on CENVAT CreditAnalysis:1. The Appellate Tribunal CESTAT AHMEDABAD heard an appeal where the Revenue challenged an order allowing Service Tax paid on Mediclaim insurance of workers by the appellant. The appeal contended that the service lacked nexus to the manufacture, citing the decision of the Hon'ble Supreme Court in the case of Maruti Suzuki. The Supreme Court held that without a nexus, credit cannot be allowed. Subsequently, the Hon'ble High Court of Bombay in the case of Ultratech Cement Ltd. ruled that the decision in Maruti Suzuki Ltd. does not apply to the admissibility of CENVAT Credit of Service Tax paid. Additionally, the respondent referred to the decision of the Hon'ble High Court of Karnataka in the case of CCE Bangalore Vs. Stanzen Toyotetsu India (P) Ltd., where it was held that the Service Tax paid on Group Health Insurance Policy, despite being a welfare measure, would be admissible as CENVAT Credit.2. The Tribunal noted that the issue was addressed by the decision of the Hon'ble High Court cited by the respondent. Considering this precedent, the Tribunal found that the appeal filed by the Revenue lacked merit and consequently rejected the appeal. The judgment underscores the importance of legal precedents and the interpretation of relevant case law in determining the admissibility of CENVAT Credit for Service Tax paid on specific services, emphasizing the significance of a nexus to the manufacturing process.
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