2017 (2) TMI 18 - AT - Central Excise

Appeal Granted for CENVAT Credit Refund on Input Services with Clarifications on Eligibility Criteria

M/s. Apotex Research Pvt. Limited. Versus Commissioner of Central Excise, Customs and Service Tax

The Tribunal partially allowed the appeal, ruling in favor of the appellant on the interpretation of input services, admissibility of CENVAT credit on ... 100% EOU - refund claim - cenvat credit - insurance service - catering services - employees health insurance services - time bar - Held that: - canteen services fall in the definition of input service and the appellant is entitled to claim refund of CENVAT credit in respect of outdoor catering services - as per the Board's Circular No.120/1/2010-ST dated 19.1.2010, there cannot be a different yardstick for establishing the nexus for taking of credit and for refund of credit - Similarly with regard to refund of CENVAT credit of service tax on general insurance services and employees group medical and health insurance services, these services are held to be input services as there is a mandatory requirement under the labour law to take insurance policies, credit allowed - refund allowed. Time bar - Held that: - as per the judgment of the Hon'ble Supreme Court in the case of Mafatlal Industries Ltd. [1996 (12) TMI 50 - SUPREME COURT OF INDIA], it was held that for every kind of refund, the time limit as prescribed under Section 11B is applicable - refund of ₹ 5,66,916/- is time bared, and is rightly rejected. Appeal disposed off - decided partly in favor of appellant. Issues involved:1. Interpretation of the definition of input service under Rule 2(l) of CENVAT Credit Rules (CCR), 2004.2. Admissibility of CENVAT credit on canteen services, general insurance services, and employees health insurance services.3. Application of time limitation under Section 11B for claiming refund of unutilized CENVAT credit.Analysis:Interpretation of the definition of input service:The appellant contended that the impugned order failed to correctly interpret the definition of input service as per Rule 2(l) of CENVAT Credit Rules. The appellant argued that the disputed services, including canteen services, fell within the definition of input services, citing precedents from higher judicial fora. The appellant emphasized that canteen services were indirectly related to manufacturing, as food was provided to employees as per statutory labor laws. The appellant challenged the Commissioner's requirement of having more than 250 employees for claiming CENVAT credit on canteen services, citing recent Tribunal and High Court decisions. Ultimately, the Tribunal held that canteen services were indeed input services, entitling the appellant to claim a refund of CENVAT credit for outdoor catering services.Admissibility of CENVAT credit on specific services:Regarding the refund of CENVAT credit on general insurance services and employees group medical and health insurance services, the appellant argued that these services were mandatory under labor laws, thus qualifying as input services. The appellant supported their argument by referencing specific case laws. The Tribunal acknowledged the mandatory nature of these services and allowed the refund of CENVAT credit for these specific services, rejecting the Commissioner's contrary findings.Application of time limitation for refund claims:The issue of time limitation under Section 11B for claiming a refund of unutilized CENVAT credit was raised. The Commissioner had rejected a refund claim amount as time-barred, while the appellant contested this decision based on previous judicial interpretations. The Tribunal considered both parties' submissions and held that one refund amount was indeed time-barred, in line with the impugned order. However, the Tribunal ruled in favor of the appellant for the remaining refund amount, concluding that the appellant was entitled to the refund for rejected input services related to outdoor catering service, general insurance, and employees' health insurance.In conclusion, the Tribunal partially allowed the appeal, emphasizing the correct interpretation of input services, the admissibility of CENVAT credit on specific services, and the application of time limitations for refund claims. The judgment provided clarity on these issues, ensuring a fair outcome based on legal principles and precedents.