TaxTMI 
TaxTMI 
2014 (2) TMI 820
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....the view that the services of insurance cover for the workers is not an input service eligible for Cenvat credit, issued a show cause notice dated 30.12.2010 for denial of the above amount of Cenvat credit, its recovery along with interest and imposition of penalty on the appellant under Rule 15 of the Cenvat Credit Rules. In this regard, para-2 of the show cause notice is reproduced below:- 2. During the course of Audit of assessee from 15.3.2010 to 19.03.2010, it was observed that the assessee had taken the group mediclaim policy of blue collar employees of its company and availed the credit of service tax which had been paid to United India Insurance Company Ltd. on premium for mediclaim insurance. It appears that this service does not ....
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....als) while rejecting the appeal also observed that the insurance policy covers not only the employees/ workers but also their family members and for this reason also the appellant would not be eligible for Cenvat credit. In this regard, the Commissioner (Appeals) referred to the Tribunal's judgment in the case of M/s. Micro Labs Ltd. Vs. CCE reported in 2010 TIOL 1492 CESTAT-BANG, wherein the Tribunal had observed that while Cenvat credit of service tax paid on the medical insurance policy and group personal accident insurance policy taken for the workers would be eligible for input service credit, the amount attributable towards the family members may not strictly fall within the purview of eligibility for Cenvat credit. Against this order....
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.... premium, as the same in part of the cost of the final product, that in this regard, he relies upon the Tribunal's judgment in the case of GTC Ltd. reported in 2012 STR 468 TR (LB), that in view of the above submissions, the appellant have strong prima facie case in their favour and hence, the requirement of pre-deposit of Cenvat credit demand, interest thereon and penalty may be waived for hearing of the appeal and recovery thereof may be stayed till the disposal of the appeal. 6. Shri Davinder Singh, ld. Departmental Representative, opposed the stay application by reiterating the findings of the Commissioner (Appeals) in the impugned order and emphasized that it is not denied by the appellant that the medical insurance cover for workers,....
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....cludes the family members of the employees and for this reason the Cenvat credit would not be admissible. This issue was not even considered by the Addl. Commissioner, but was raised for the first time before the Commissioner (Appeals). It is well settled law laid down by a series of Judgments of the Apex Court including the Apex court's judgment in the case of Toyo Engineering India Ltd. (supra) that the grounds, which do not find mention in the show cause notice, could not be taken in the adjudication or appeal proceedings and that the adjudication order or appellate order cannot travel beyond the grounds mentioned in the show cause notice. Thus, the impugned order as such has travelled beyond the allegations made in the show cause notice....