Custom, Excise & Service Tax Tribunal
Reliance Smsl Ltd vs Belapur on 19 June, 2019
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
MUMBAI
WEST ZONAL BENCH, MUMBAI
Service Tax Appeal No. 87777 of 2018.
(Arising out of Order-in-Appeal No. MKK/666/RGDAPP/2017 dated 29-32018 passed
by the Commissioner, Central Tax, Central Excise & Service Tax (Appeals), Raigad.
RELIANCE SMSL LTD. ........Appellant
4 GFCCA 03 Bldg. No. 4, Gr. Flr.,
Reliance Coron Park, 5 TTC Indl. Area,
T.B. Road, Ghansoli,
Thane - 400701
VERSUS
Commissioner of CGST-Belapur ........Respondent
CGO Complex, 10, CBD Belapur,
Navi Mumbai - 400 614
APPERANCE:
Shri Ramnath Prabhu, Advocate for the Appellant
Shri S.K. Hattangadi, Addl. Commissioner, Authorised Representatives for
the Respondent
CORAM: HON'BLE DR. SUVENDU KUMAR PATI, MEMBER (JUDICIAL)
FINAL ORDER NO. A/86132/2019
Date of Hearing: 20-02-2019
Date of Decision: 19-06-2019
Appeal No. ST/87777/18
2
PER: DR. SUVENDU KUMAR PATI
Denial of CENVAT credit on input services towards purchase of
Group Insurance Policy to the extent of 4/5 times of the tax paid is
assailed in this appeal.
2. Factual background of this case is that Appellant is engaged in
providing Manpower Supply Services to its clients who are mainly
based in retail business and recruits employees depending on clients'
requirements. Salary and other perks of the employees including
various insurance coverages were borne by the appellant. The
Appellant availed CENVAT credit on Service Tax paid in respect of
insurance premium paid to the insurance company and during audit it
was observed that it had availed credit on input services to the tune
of Rs.9,73,944/- during the period 2009-10 and 2010-11 which audit
Officers claimed as not admissible. Litigation went upto the level of
Commissioner (Appeals) who held that CENVAT credit is admissible in
respect of insurance services but in respect of Group Health Insurance
policy, since upto 5 members of a family of an employee are covered
in that policy, admissibility of cenvat credit for the employee was
restricted to 1/5th of the total Service Tax paid on the said premium.
Appellant disputed the finding and filed appeal before the CESTAT on
this limited aspect. During course of hearing of the appeal, in placing
reliance on the decision reported in " BNY Mellon International
Operations (I) Pvt. Ltd., v. CCE, 2016 (45) STR 116 (T), Ramboll
Appeal No. ST/87777/18
3
Imisoft Pvt Ltd. v. CCE, 2017 (47) STR (IT), PTC Software (India) Pvt
Ltd. v. CCE, 2014 (35) STR 632(T), Broadcom India Technologies Pvt
Ltd. v. CCE, 2016-TIOL-1606-CESTAT-HYD, Delphi-TVS Diesel
Systems Ltd. v. CCE, 2018-TIOL-2292-CESTAT-MAD, Titan Industries
Ltd., v. CCE, 2018(15) GSTL 75 (T), Prism Cement Ltd., v. CCE 2018-
tiol-1289-cestat-Del., BNY Mellon International Operations (I) Pvt. Ltd.
v. CCE, 2017 (47) STR 290 (T), CCE v. Reliance Industries Ltd., 2016-
TIOL-322-CESTAT-MUM. Learned Counsel for the Appellant Mr.
Ramnath Prabh argued justifying the admissibility of cenvat credit on
the entire amount of Service Tax paid towards premium paid in respect
of Group Insurance policy. On the contrary Learned AR Shri S.K.
Hattangadi, Addl. Commissioner, in submitting case law reported in
2012 (280) E.L.T. 516 (Tri-Bng.) in the case of Commissioner, Central
Excise of Tirupati v. Nutrine Confectionery Co. Ltd. submitted then
when policy benefit for family members involved additional premium,
services not tenable as input service in case of Accident Group
Insurance policy.
3. Heard from both sides at length on other day and perused the
case record. As consistent view was taken by the CESTAT, as referred
in the relied upon judgement by the Appellant, there is no dispute
regarding admissibility of cenvat credit on insurance policies and
Factories Act also made it a mandatory requirement, if employees'
strength exceeds 250 nos. The issue involved in the present litigation
is the admissibility of group insurance accident policy that had also
covered the family members of the employee which is admittedly not
Appeal No. ST/87777/18
4
under statutory liability as envisaged in Employee State Insurance Act
1948. Going by the judgement of BNY Mellon International Operations
(I) Pvt. Ltd., as submitted by the Appellant and Nutrine Confectionery
Co. Ltd. as submitted by the respondent Department, if differential
premiums are required to be paid for inclusion and exclusion of family
members of the employees, credit is supposed to be restricted to the
premium paid for the employee alone. In the Nutrine Confectionery
Co. judgement, while confirming accident insurance policy as input
service, the matter was remanded back for verification as to if
premium was paid for the employee only and not in respect of the
entire family members. In this regard appellant has submitted copy
of a Declaration Certificate received from the Oriental Insurance
Company Ltd., a Government of India undertaking dated 14-01-2019,
in which clear reference is made that there was no additional insurance
premium collected by Insurance Co. for extending the benefit to the
dependent family members of the employee and the same can be
taken as additional evidence under Rule 23 of CESTAT Procedure Rules
since Appellant was allowed by the Bench on 20-12-2018 to produce
such document. This being the factual and legal scenario, I have got
no hesitation to hold a finding that the entire credit availed towards
purchase of Accident Group Insurance policy is admissible to the
Appellant and it had rightly availed so. Hence the order.
Appeal No. ST/87777/18
5
ORDER
4. The appeal is allowed and the Order-in-Appeal No. MKK/666/RGDAPP/2017 dated 29-32018 passed by the Commissioner, Central Tax, Central Excise & Service Tax (Appeals), Raigad is here by set aside.
(Order pronounced in the Court on 19-06-2019) (DR. SUVENDU KUMAR PATI) MEMBER (JUDICIAL) John