Prospective Cenvat credit amendment cannot defeat health insurance service credit for a transaction completed before the change.

Cenvat credit on health insurance service remained available where the service was received, paid for, and completed in March 2011, before the amendment effective from 1 April 2011 excluded insurance services from the definition of input service. The completed transaction could not be governed by a later restrictive amendment, and the point of taxation was treated as the time the service was deemed provided. On that basis, the later exclusion had no application to the earlier service transaction, so credit was sustainable.

---

---

Issues: Whether the respondent was entitled to Cenvat credit on health insurance service availed and paid in March 2011, when the service period extended to a time after the amendment excluding insurance services from the definition of input service with effect from 1 April 2011.

Analysis: The credit was availed only after the service had been received, the consideration had been paid, and the transaction had been completed in March 2011. The amended Cenvat Credit Rules, brought into force from 1 April 2011, could not govern a service transaction already completed before that date. The reference to the Point of Taxation Rules was accepted, and the point of taxation was treated as the time when the service was deemed to have been provided. Since the service was provided in March 2011 and all formalities were completed then, the later amendment had no application.

Conclusion: The respondent was entitled to the credit and the Revenue's challenge failed.

Final Conclusion: Credit taken for a service transaction completed before the effective date of the amendment could not be denied on the basis of the later exclusion of insurance services from input service.

Ratio Decidendi: An amendment restricting eligibility for Cenvat credit operates prospectively and does not apply to a service transaction that was fully completed before the amendment came into force, where the point of taxation had already arisen.

---