2021 (9) TMI 1099

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....s whether the Appellants, who are engaged into manufacture & sale of goods (Pumps), are eligible to avail Cenvat Credit of service tax on Group Medical insurance Policy for its employees and their family members w.e.f. 1.4.2011 in view of the amended definition of 'input service' under Rule 2(l) of Cenvat Credit Rules, 2004 and if the answer is in negative then whether there was any malafide intention on the part of the Appellant? 3.  The Appellants are engaged into manufacture & sale of goods (Pumps). During the course of audit, it was observed that they availed credit of service tax on Group Medical insurance Policy for its employees and their family members during the period from 2008-09 to 2012-13, which was used for the persona....

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.... the number of dependants because it is same for all the employees, therefore in view of the decisions of this Tribunal in the matters of BNY Mellon International Operations (I) Pvt. Ltd. vs. CCE; 2016(45)STR 116 and BNY Mellon International Operations (I) Pvt. Ltd. vs. CCE; 2017(47)STR 290 respectively, the Cenvat Credit can be availed on the service tax paid on such Group Medical insurance Policies. According to him no additional cost premium is paid for extending benefit to the family members and hence the Cenvat credit is admissible and for that he relied upon the decision in the matter of Reliance SMSL Ltd. vs. Commissioner, CGST; 2019-TIOL-2785-CESTAT-Mum. He also submits that extended period of limitation is not invokable in the fact....

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....e instant case as all those case laws pertain to the period prior to 1.4.2011 whereas in the instant matter the learned Commissioner already granted relief to the appellants so far as the period prior to 1.4.2011 is concerned. Rule 2(l), CCR, 2004 has been amended w.e.f. 1.4.2011 and from that date 'insurance' has been brought under the exclusion clause and there is no ambiguity/confusion in understanding the said definition of 'input service' after 1.4.2011. Since w.e.f. 1.4.2011 the service in issue clearly falls in the excluded category, therefore the Cenvat credit availed on these services is inadmissible to the Appellant whether without any additional premium or even if it is attributable to the family members only. When the language o....

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....on above, service used by the manufacture, whether directly or indirectly, in or in relation to the manufacture of final products are considered as eligible input service, while in the instant case credit of service tax has been availed on insurance premium paid for dependants of employees and the same has no nexus with manufacturing activities or clearance of final products upto the place of removal and at best can be considered as welfare measure. Thus, the assessee has wrongly availed Cenvat Credit on employee's dependents' personal insurance and deliberately suppressed the facts of   availment of wrong Cenvat Credit to the department with intent to avail and utilize the same in wrong way...."(emphasis supplied). A perusal of t....