TaxTMI 
TaxTMI 
2023 (7) TMI 261
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....). (iii) Non-payment of Service Tax under RCM on legal charges (Rs.35,203/-). 1.1 The said aforesaid amounts were accordingly prayed to be recovered from the appellant along with the proportionate interest and the appropriate penalties under Section 76, 77 and 78 of the Finance Act, 1994. The said proposal was initially confirmed vide Order-in-Original No. 15/2020 dated 09.03.2021. Being aggrieved the appellant is before this Tribunal. 2. We have heard Shri Pawan Arora and Ms. Akanksha Kumari, learned Advocates for the appellant and Shri Harshvardhan, learned Authorized Representative for the department. 3. Learned counsel for the appellant has mentioned that the availment of Cenvat credit on employee insurance has been denied based on exclusion clause of the definition of input services in Cenvat Credit Rules, 2004 (hereinafter referred as CCR, 2004). It is impressed upon that the exclusion of certain services from input services is only when such services are purely for personal use or consumption of any employee. The decision of M/s. Rajratan Global Wire Ltd. Vs. Commissioner, Central Goods and Service Tax, Ujjain (MP) reported as 2021-TIOL-315- CESTAT-Delhi is relied upon.....
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....-reversal of Cenvat credit under Rule 6(3) of CCR, 2004 has been ordered. The order of imposition of penalty due to non-payment of service tax under Reverse Charge Mechanism on legal charges is also impressed as correct. The appeal in question is accordingly prayed to be decided in favour of Revenue at least for the two counts as mentioned above. 5. Having heard the rival contentions and perusing the records. We observe and hold as follows: 6. The three issues as were raised after the audit of the appellant are as follows: (i) Cenvat credit availed by the company on Group Personal Accident Policy, Group Term Life Policy and Group Mediclaim Policy taken for employees. (ii) Method/option of Cenvat credit reversal under Rule 6 of Cenvat Credit Rules pertaining to non-taxable service provided by the appellant in the state of Jammu & Kashmir. (iii) Penalty on tax liability discharged under reverse charge on legal services. 7. As far as the first noticed shortcoming is concerned, we observe that the adjudicating authority has held that the Cenvat credit availed by the appellant on Group Personal Accident Policy, Group Term Life Policy and Group Mediclaim Policy taken for the emp....
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....nce, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee; [Explanation. - For the purpose of this clause, sales promotion includes services by way of sale of dutiable goods on commission basis.] 8. The bare perusal of this definition as reproduced above shows that it would mean any service used by the manufacturer/the service provider whether directly or indirectly, in or in relation to the manufacture of final product and include services used in relation to the activities relating to business or capital goods. That apart, the definition of input services is too broad. It is inclusive also in definition what is contained in the definition is only illustrative in nature. However, holding that the activities relation to business and any services rendered in connection therewith would form the part of input services. The Hon'ble High Court of Bombay in the case of Coca Cola (I) Pvt. Ltd. Vs. CCE. Pune-III reported as 2009 (242) E.L.T. 168 (Bom.) has held that expression 'means and includes' is exhaustive and expression 'business'....
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.... final product. It was observed as an undisputed fact in the said case that the premium so paid has formed part of the cost of excisable goods on which the excise duty has been paid on removal. Therefore, the assessee is entitled to avail Cenvat credit for the insurance premium paid in respect of the group insurance/insurance of employees including retired employees/mediclaim as these are covered under the definition of input services having nexus to the business of the assessee. The Hon'ble Bombay High Court reiterated this decision subsequently in the case of Commissioner of C. Ex., Nagpur Vs. Ultratech Cement Ltd. reported as 2010 (20) S.T.R. 577 (Bom.). All these decisions have been considered by the Larger Bench of this Tribunal while deciding the case of Reliance Industries Ltd. Vs. Commr. of C. Ex. & S.T. (LTU), Mumbai reported as 2022 (60) G.S.T.L. 442 (Tri.-LB), wherein it was held as follows: "34. It needs be noted here that though the Bombay High Court in Ultratech Cement categorised 'input service' into three categories, as against five categories by the Bombay High Court in Coca Cola India, there is actually no difference between the two judgments as the third catego....
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....paration Scheme. The interpretation of Rule 2(l) of the 2004 Rules has been conclusively settled by the Hon'ble Bombay High Court in Coca Cola India and Ultratech Cement (supra).It has also been consistently so held in Principal Commissioner Vs. Essar Oil Ltd. reported as 2016 (41) S.T.R. 389 (Guj.), Commr. of S.T., Mumbai-II Vs. Willis Processing Services (India) Pvt. Ltd. reported as 2017 (7) G.S.T.L. 12 (Bom.) and Commr. of C. Ex. & Service Tax Vs. Tata Consultancy Services Ltd. reported as 2018 (362) E.L.T. 777 (Bom.). 11. This Tribunal also in the case of M/s. Rajratan Global Wire Ltd. (supra)has held that once there is no evidence that the insurance service was obtained for the personal use of the employee of assessee, it is definitely an eligible input service for which the assessee is entitled to claim the Cenvat credit. Above all, department has conceded for this issue to no more res integra and to have been decided in favour of the assessee. We hold that the Cenvat credit availed by the appellant on the various insurance policies taken for its employee were eligible for availment is permissible. The order of reversing/disallowing the same is therefore liable to be set as....
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....of transportation of goods or passengers by rail the amount required to be paid under clause (i) shall be an amount equal to 2 per cent of value of the exempted services. Explanation 1. - If the manufacturer of goods or the provider of output service, avails any of the option under this sub-rule, he shall exercise such option for all exempted goods manufactured by him or, as the case may be, all exempted services provided by him, and such option shall not be withdrawn during the remaining part of the financial year. 13. We observe, from the bare perusal, that for the said proportionate reversal of Cenvat credit, Rule 6(3) provides either of the following options to a provider of output service that he shall either: (a) Pay an amount of equal to 5 per cent of the value of exempted service or pay an amount equal to proportionate turnover of the exempted services provided. OR shall determine and pay, provisionally for every month, the amount equivalent to CENVAT Credit attributable to inputs used for provisions of exempted service. OR shall determine finally the amount of CENVAT Credit attributable to the exempted goods or services for the whole financial year. OR shall pa....
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....ed as tool of oppression to extract the amount which is much beyond the remedial measure and what cannot be collected directly and cannot be collected indirectly, as well. Accordingly, we hold that in case of substantive compliance made by the assessee i.e. calculation of the amount of Cenvat credit proportionate reversal on annual basis and payment of the amount before the prescribed date, substantial benefit cannot be denied as it tantamount to not availing of input service credit on common inputs which are going into exempted services. We rely upon the decision of Hon'ble Supreme Court in the case of Chandrapur Magnet Wires (P) Ltd. Vs. Collector of C. Excise, Nagpur reported as 1996 (81) E.L.T 3 (SC). In light of the above discussion, we hold that reversal of Cenvat credit on common input services has wrongly been ordered by the adjudicating authority below. 16. Coming to the third shortcoming noticed by the department i.e. with respect to the penalty of tax liability discharged under Reverse Charge Mechanism on legal services. We observe that the adjudicating authority has held that the service recipient is liable to pay 100 per cent service tax. We observe that the said find....