2022 (12) TMI 598

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....ereof under rule 14 of CENVAT Credit Rules, 2004, along with applicable interest, while imposing penalty of like amount under rule 15 of CENVAT Credit Rules, 2004 by holding that the tax discharged on procurement of 'insurance service' for covering medical claims of employees who had opted for the Voluntary Separation Scheme (VRS) initiated by the appellant on 6th March 2007 was not to be availed as credit. The policy enabled the candidate employees along with spouse to be covered to the extent of Rs.5,00,000 for the period up to which they would, but for pre-mature separation under this scheme, have attained the age of retirement. The tax charged on premium paid on 'Special Contigency Insurance Nivrutti Raksha Policy' was availed as credit....

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....oncluded that '52. The interpretation of rule 2 (l) of the 2004 Rules has been conclusively settled by the jurisdictional Bombay High Court in Coca Cola India and Ultratech Cement. It has also been consistently so held in Principal Commissioner vs. Essar Oil Ltd.25, Commr. of S.T., Mumbai-II vs. Willis Processing Services (India) Pvt. Ltd.26 and Commr. of C. Ex. & Service Tax vs. Tata Consultancy Services Ltd.27. It would be pertinent to reproduce the relevant portion of the judgment of the Bombay High Court in Tata Consultancy Services and it is as follows: "2. The Revenue proposes the questions at page Nos. 6 and 7 as substantial questions of law. However, these very questions have been considered by this Court in the two judgments. O....

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....n CAS-4, which deals with costs relating to employees. Paragraph 5.2 of CAS-4 deals only with the meaning of the expression, "direct wages and salaries", which is only one of the many items that go into preparation of a CAS-4 Certificate, as is clear from "direct wages and salaries " appearing at Serial No. 2 of the Certificate. There are other components such as works overheads, quality control cost, administrative overheads. This position has also been clarified in paragraph 4.1 of CAS-4, which defines the "cost of production" as the sum total of material consumed, direct wages and salaries, direct expenses, works overheads, quality control costs, research and development cost, packing cost, administrative overheads relating to production....

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....bmitted that the essence of the finding on CAS-4 in the very same order of the Larger Bench requires that the appropriate authority should scrutinize CAS-4 statement for ascertainment. We, however, take note that the reference to CAS-4 did not have its genesis in the adjudication proceedings but from a submission to the referral bench while placing reliance on the decision of the Hon'ble High Court of Karnataka in re Millipore India Pvt Ltd. The settlement of that principle of inclusion in CAS-4 as sufficing to avail credit was a response to the doubts entertained by the referral bench and, moreover, CAS-4 is of relevance only in captive consumption. Contextually, the Larger Bench held that the components of CAS-4 are also found on CAS-7 re....