https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=768652 https://www.taxtmi.com/caselaws?id=768652 CENVAT Credit - input services - renting of motor vehicle - Repair and maintenance services relating to motor vehicle - life/medical or health insurance services extended to staff and personnel of CISF security - services of catering, health, travel - services of miscellaneous nature viz., removal of honey comb, removal of debris, disposal of canteen waste/medical waste, maintenance of garden & grass cutting etc., which are not related to manufacturing activities - levy of interet and penalty. Medical/health insurance policy taken for their employees - HELD THAT:- The appellants are mandatorily required to take medical/health insurance for their employees in compliance with the above statutory requirement. However, for those employees who are not covered by the ESI scheme, general medical/health insurance has been taken by the appellants - the beneficiary of such services is the appellants and not the individual employees. Therefore, the embargo put on the input services used primarily for personal use or consumption of any employee for exclusion from the scope of coverage of 'input service' under Clause (C) of Rule 2(l) of CCR of 2004, does not apply to the present case. The dispute in respect of availment of Cenvat credit on medical insurance service is no more open to debate, as in a number of cases the Tribunal has held the same as admissible - Reliance can be placed in the case of Honda Motorcycle & Scooter (I) Pvt. Ltd. Vs. Commissioner of C. Ex. Delhi-III [2016 (8) TMI 308 - CESTAT CHANDIGARH] - Service Tax paid on medical/health insurance services for an amount of Rs.35,42,452/- are eligible to be availed of Cenvat credit as per statutory provisions. Security services provided by CISF - HELD THAT:- 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, Service Tax paid on medical/health insurance services for CISF Security for an amount of Rs.10,06,493/- are eligible to be availed of as CENVAT credit. Service tax paid on maintenance of gardens - HELD THAT:- In view of the mandatory nature of services that is required to be engaged by industry in carrying out their manufacturing activity, we find that the services engaged by the appellants in respect of maintenance of gardens, dry grass cutting in order to avoid fire hazard is found to be eligible input services. Therefore, Service Tax paid on such services for an amount of Rs.4,88,735/- are eligible to be availed of as CENVAT credit. Service tax paid on the services of search of documents which are stored in safe custody for eight years - HELD THAT:- The services of underwater diving services used in the appellants refinery is also found to be an essential services inasmuch as these services are used for removing the debris from the sea, near the jetty pumps maintained for receipt of crude petroleum or other petroleum products, which are used in processing at their refinery plant. As these services are in the nature of routine repair and maintenance of operational equipment involved in the manufacturing process, these are covered as eligible input under Rule 2(l) ibid. Therefore, Service Tax paid on the above two services for an amount of Rs.2,842/- as discussed above are eligible to be availed of as CENVAT credit. Outdoor catering services - HELD THAT:- The service is specifically excluded under clause (C) of Rule 2(l) ibid, it cannot be included in the eligible input services. Maintenance and repair of asphalt road, removal of crushed stones etc. - bus service for travel of CISF security from Vashi to Bandra Station, in the city which is outside the refinery plant - maintenance of honeycomb - supply and erection of shamiana which is used for resting of contract workers during shutdown maintenance period - video imaging work, programme services in respect of various programs conducted for vendors and for discussion point with employees - HELD THAT:- There are no proper justification have been provided by the appellants for treating these services as input services, having direct or indirect connection with the manufacturing operations of the appellants. Hence, we do not find any reason to differ with the findings of the learned adjudicating authority, in rejecting the CENVAT credit taken as ineligible input service to the extent of an amount of Rs.9,03,065/- on the above services. Service tax paid on insurance premium in respect of health/medical insurance of family members/dependents of the employees - HELD THAT:- The appellants have already reversed the ineligible CENVAT credit prior to the issue of SCN, on their own. Levy of interest and penalty - HELD THAT:- There do not exist any ground for imposition of penalty on the appellants and for levy of any interest on the above disputed amount, which have been confirmed as part of the adjudged demands in the impugned order. In view of detailed discussions on individual input services, it is opined that for total amount of Rs. 50,40,522/- such services are found to be eligible for availing the service tax paid as CENVAT credit. Therefore, to this extent the impugned order is not legally sustainable. Conclusion - The appellants are entitled to CENVAT credit for an amount of Rs. 50,40,522/- for services found to be eligible under the statutory provisions. The denial of CENVAT credit for services amounting to Rs.9,03,065/- partially upheld, which did not qualify as input services. Appeal disposed off. Case-Laws Central Excise Mon, 07 Apr 2025 00:00:00 +0530