Custom, Excise & Service Tax Tribunal
Reliance Industries Ltd vs Ccc & St (Ltu) Mumbai on 26 August, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT No. I Application No. Appeal No. Appellant Respondent ST/Extn/ 94568/15 ST/722/10 Reliance Industries Ltd. CCC & ST (LTU) Mumbai ST/Extn/ 94569/15 ST/723/10 Reliance Industries Ltd. CCC & ST (LTU) Mumbai ------
ST/724/10 Reliance Industries Ltd.
CCC & ST (LTU) Mumbai ST/Extn/ 94570/15 ST/725/10 Reliance Industries Ltd.
CCC & ST (LTU) Mumbai (Arising out of Order-in-Appeal No. RT/34-37/LTU/MUM/2010 dated 27.09.2010 passed by Commissioner of Service Tax (Appeals), Mumbai) For approval and signature:
Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) ================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
Appearance:
Shri J.C. Patel, Advocate for appellant Shri K.S. Mishra, Addl. Commissioner (AR) for respondent CORAM:
Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. C.J. Mathew, Member (Technical) Date of Hearing: 26.08.2015 Date of Decision: 26.08.2015 ORDER NO Per: M.V. Ravindran All these appeals are taken up for disposal by a common order as the issue involved is same. Applications filed by the appellants for extension of stay are also disposed of as the appeals are taken up for disposal.
2. Heard both sides and perused the records.
3. The issue involved in these cases is whether the appellant is eligible to avail CENVAT credit of the service tax paid on insurance premium to the Insurance Company for Group Insurance and medi-claim policies taken for existing employees as well as for the retired employees; also on the service tax paid on the insurance premium for the policy taken for stocks lying in the foreign warehouses. Adjudicating authority as well as the first appellate authority have come to a conclusion that the service tax paid on the life insurance/medi-claim policy for the existing employees is eligible for CENVAT credit but the service tax paid on the insurance premium for the retired employees is ineligible as they are not covered under the definition of Rule 2(l) of the Cenvat Credit Rules, 2004 and in respect of the service tax paid on insurance premium for insurance cover for the stock lying in foreign warehouses, it was the findings of both the lower authorities that the same is ineligible as the expenses incurred are beyond the place of removal of final products i.e. port of export and does not get covered under the definition of input services under Rule 2(l) of the Cenvat Credit Rules, 2004.
5. We find that in respect of the service tax paid on the premium of the life insurance/medi-claim taken for the existing employees as well as the retired employees or the employees who had taken voluntary retirement is now eligible to avail CENVAT credit as this Bench in the appellants own case in Appeal No. E/1283/2012-Mum as reported at 2015 (38) STR 217 (Tri. Mum) has held that such credit is available relying on the judgement of the Honble High Court of Karnataka in the case of Millipore India Ltd. 2012 (26) STR 514 (Kar.). On an identical issue for the earlier period, this Bench having taken a view that the appellant is eligible to avail CENVAT credit, following the same, we hold that the appellant is eligible to avail CENVAT credit of the service tax paid on the premium of the insurance cover extended to their employees who are retired.
5.1 As regards the service tax credit availed on the amount of insurance premium paid on the stocks which were lying in warehouses in foreign countries, we find that the lower authorities have mis-directed their findings, without considering the fact that the said services would get cover under the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006 (herein-after referred to as Taxation of Services Rules). We find that there is no dispute as to the fact that the insurance cover was taken for the stocks which were lying in warehouses in a foreign country and the service tax liability is fastened upon the appellant under the provisions of Section 66A of the Finance Act, 1994. We find that as per the provisions of Taxation of Services Rules, it has been mentioned that no tax liability arises on services (c) those specified in clause (ii) of this rule, be such services as are received by a recipient located in India for use in relation to business or commerce.
It is to be noted that insurance services are one of the services that are covered under Taxation of Services Rules, but got excluded as clause (c) as reproduced herein above.
5.2 We find strong force in the contentions raised by the appellants that it is not in dispute that the services were used in relation to business or commerce. We also find that the Honble High Court in the case of Glyph International Ltd. V. Union of India 2012 (25) STR 209 (All.) has specifically recorded as under:-
34. It was clarified in the letter dated July 16, 2009 issued by the Joint Secretary (TRU-II), Tax Research Unit, Department of Revenue, Ministry of Finance, Government of India, that Section 66A is not a charging section by itself. In fact, it only creates a legal fiction to deem import of service, as provision of service within India, so that the provisions of Chapter-V of the Finance Act, 1994 can be applied to. The charging section remains Section 66, even for the service imported. In other words, the tax collected from the recipient in terms of Section 66A, is also tax chargeable under Section 66 of the Finance Act, 1994 and thus there is no mistake in the relevant provision of the Cenvat Credit Rules, 2004 and that credit of tax paid on imported services should be allowed, if they are in the nature of input services. 5.3 We further find that this Tribunal in the case of CCE v. 2009 (14) STR 305 (Tri. Ahmd.) had a occasion to consider the place of rendering of services and has held as under:-
4.2?Another point that has been relied upon by the revenue is that service tax credit is not admissible since the erection and commissioning activity is a post removal/post manufacturing activity. I have already mentioned earlier that in the case of service tax what is required to be examined is whether the service has been used in or in relation to manufacture directly or indirectly. While the eligibility for service tax credit on outward transport services is to be examined in connection with place of removal, there is no such requirement as regards other services. In respect of other services what is to be examined is whether they can be held to be rendered in or in relation to manufacture directly or indirectly. Once the whole transaction of manufacture of the machine, erection and commissioning and supply is treated as one transaction and excise duty is charged on the whole transaction value, services rendered for the purpose of completion of this whole transaction has to be treated to have been rendered in or in relation to the manufacture.
6. In view of the foregoing and in the facts and circumstances of this case, we find that the CENVAT credit sought to be denied by both the lower authorities is not in consonance with the law. Accordingly, we set aside the impugned order and allow the appeal with consequential relief, if any.
(Dictated in Court) (C.J. Mathew) Member (Technical) (M.V. Ravindran) Member (Judicial) nsk ??
??
??
??
1 6