2019 (7) TMI 652

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....n Technology Software Services". They filed refund claims under Rule 5 of CENVAT Credit Rules 2004 seeking refund of the CENVAT credit used in the output services relatable to their export of services. These refund claims were partly allowed and partly rejected by the original authority and subsequently on appeal, partly modified by the first appellate authority. The details of these are as follows: APPEAL No. ST/30910/2018 S.No. Service Refund disallowed Reasons for rejection 1. General Insurance Service Rs. 10,67,130 On perusal of the documents (Input invoices) submitted, it was observed that the insurance premium was paid for the benefit of the employees and their respective family members and is in the nature of life insurance. The appellants have not established that the said insurance is in the nature of accident insurance or its being pertaining to the assets of the company or it was statutorily required under any law. Since the Insurance premium has been paid for the benefit of the employees as well as their families, it specifically falls under the exclusion clause of the definition of input service under Rule 2(1) of the CCR. 2. Works Contract Service Rs....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ice dated 08 June 2016 5. In respect of the invoice issued by ICICI Lombard General Insurance Company Ltd., Ld. CA submits that the insurance is not for the benefit of any individual employee but it is an insurance for the Directors and their Officers against any liability which they may incur during the course of their official work. He draws the attention of the Bench to the definition of 'input services' under Rule 2(l) of CCR 2004, as applicable during the relevant period, as follows: (l) input service" means any service (i) used by a provider of output service for providing an output service; or (ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products up to the place of removal, and includes services used in relation to modernisation, renovation or repairs of a factory, premises of the provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage up to the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networki....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ent, Ld. CA submits that on similar issue in respect of Ernst and Young Associates LLP as reported in [2017-TIOL-4394- CESTAT-CHD] it has been held that professional indemnity service is used by the assessee and is not excluded as an input service under Rule 2(l) of CCR 2004. 8. On examining the issue, I find that the insurance in question was not for the personal benefit of any individual or Director, it only covers any liability that may arise on them in the course of their official work. Therefore, respectfully concurring with the decision of CESTAT, Chandigarh in the case of Ernst and Young Associates (supra), I hold that the appellant is entitled for the benefit of CENVAT credit under Rule 2(l) and consequently refund under Rule 5 of CCR 2004 in respect of this invoice. 9. IFFCO-TOKIO General Insurance Co. Ltd.: These three invoices provide medical insurance for the employees and their families. Ld. CA argues that they should be entitled CENVAT Credit as well as refund of credit on these services. He relies on the case law of Sundaram Fasteners Limited [2016(43) S.T.R. 454 (Tri.-Chennai) and Fiem Industries Limited [2016(43) S.T.R (Tri.- Chennai)]. In both these case laws,....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the invoices issued by M/s IFFCO-TOKIO towards health insurance. 11. Invoices issued by M/s TATA AIG General Insurance Co. Ltd.: A perusal of these invoices clearly shows that no individual has been made the beneficiary in this invoice. It is a commercial liability insurance meant for the company itself. Therefore, this is clearly not excluded under clause 'C' of Rule 2(l). I, therefore, find that the appellant is entitled for CENVAT Credit on the invoice issued by M/s TATA AIG General Insurance Company Limited. 12. Invoices issued by New Vision Interiors for works contract services: It is undisputed that all these invoices pertain to Works Contract Services. A perusal of the invoices shows that they pertain to preparation of caution signages and scaffolding for facade glass and fixing of thick toughen glass, lift low side work purpose etc. It is the contention of Ld. CA that Rule 2(l) of CCR 2004 includes services used in modernisation, renovation or repairs of a factory premises of provider of output services or an office relating to such factory or premises. Therefore, they are clearly entitled to CENVAT credit on this account. Ld. DR, on the other hand, asserts that the de....