Custom, Excise & Service Tax Tribunal
M/S. Faurecia Interior Systems (I) P. ... vs Commissioner Of Central Excise, Pune ... on 13 April, 2015
IN THE CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
Appeal No.
ST/85802/13
- Mum
(Arising out Order-in-Appeal No. PIII/RP/244/2012 dated 03.10.2012 passed by the Commissioner of Central Excise (Appeals), Pune III)
For approval and signature:
Honble Mr. M.V. Ravindran, Member (Judicial)
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?
M/s. Faurecia Interior Systems (I) P. Ltd.
Appellant
Vs.
Commissioner of Central Excise, Pune III
Respondent
Appearance:
Shri Kaustubh Kairnar, Advocate for the appellant Shri S.V. Nair, Supdt. (AR) for the respondent CORAM:
Honble Mr. M.V. Ravindran, Member (Judicial) Date of hearing : 13.04.2015 Date of decision : 13.04.2015 O R D E R No:..
This appeal is directed against Order-in-Appeal No. PIII/RP/244/2012 dated 03.10.2012.
2. Appeal is directed against rejection of refund of `5.58 lakhs on the ground that services on which input Cenvat Credit was availed was not directly related to the export of services.
3. Heard both sides and perused the record.
4. On perusal of the record, it transpires that the lower authorities have rejected the refund claim in respect of the service tax credit availed on the premium paid towards group mediclaim insurance for the employees and the families and dependents; on the service tax paid for car parking place rented by the assessee and the consultancy charges which were incurred by the appellant for only review of performance of the employees.
5. I find strong force in the contention raised by the ld. Counsel for the appellant as to that the issue is no more res integra. Similar issue was decided by the bench in the PTC Software (India) P. Ltd. 2014 (35) STR 632 wherein issue on same set of facts was considered. With respect, I reproduce the relevant paragraphs :
3.2.1?As regards the insurance premium paid for members of the family of the employees and the service tax paid thereon, the policy is a group insurance which is a perquisite given to the employees as part of their employment. The premium paid for the group insurance is the same whether it is for the employee or for the family members, under the group insurance scheme. The Tribunal in the case of Stanzen Toyotetsu India Pvt. Ltd. v. Commissioner of Central Excise, Bangalore-III - 2009 (14) S.T.R. 316 (Tri.-Bang.) has held that Service Tax paid on group insurance health policy is an eligible input service and credit would be available under the Cenvat Credit Rules. The said decision of the Tribunal has also been upheld by the Honble High Court of Karnataka in the same case reported in 2011 (23) S.T.R. 444 (Kar.). The case of group insurance is also part of the cost of rendering the service under the accounting standards as per CAS-4 and, therefore, the appellant is entitled for availing the credit of Service Tax paid on group insurance premium even if the policy covers members of the family of the employees. The said decision was also followed by the Honble Karnataka High Court in the case of Commissioner of Central Excise & Service Tax v. Micro Labs Ltd. - 2012 (26) S.T.R. 383 (Kar.) = 2011 (270) E.L.T. 156 (Kar.) wherein it was held that group insurance health policy, though a welfare measure, is an obligation cast under the statute that the employer has to obey and, therefore, the policy taken by the employer is a service constituting activity relating to business which is covered under the input service definition.
5.1?As regards the rejection of refund pertaining to Service Tax paid on group insurance policy, which also includes members of the family of the employee, the issue has already been settled in favour of the appellant in the cases of Micro Labs Ltd. and Stanzen Toyotetsu India (P) Ltd., cited supra decided by the Honble High Court of Karnataka. Therefore, the appellant is rightly entitled to take credit of Service Tax paid on insurance premium on group insurance policy as the said service is an eligible input service and we hold accordingly.
5.2?Similarly, as regards the Service Tax paid on car parking rentals, the car parking is part of the business premises of the appellant and is a business expenditure. Therefore, it is an eligible input service as defined in Rule 2(l) of the Cenvat Credit Rules, 2004. The Honble High Court of Bombay in the case of Ultratech Cement Ltd. [2010 (20) S.T.R. 577 (Bom.) = 2010 (260) E.L.T. 369 (Bom.)] held that any input service which has a nexus with the business of manufacture or relating to business would get covered under the term input service under Rule 2(l) of the Cenvat Credit Rules and accordingly Cenvat credit on such services would be available. In view of the above we are of the considered view that service tax paid on car parking rentals is an eligible input service under Rule 2(l) of the Cenvat Credit Rules and consequently the appellant would be eligible for refund of the same under Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No. 5/2006-S.T., dated 14-3-2006.
6. It can be seen from the above reproduced paragraphs, the issue is now squarely settled in favour of the appellant.
7. I find that the Principal bench of the Tribunal in New Delhi in KPMG vs. CCE 2014 (33) STR 96 was also considering the same issue and has held in favour of the assessee.
8. In view of the facts and circumstances of this case and the authoritative judicial pronouncements, I find the impugned order is liable to be set aside and I do so.
9. The impugned order is set aside and the appeal is allowed with consequential relief, if any.
(Dictated in Court) (M.V. Ravindran) Member (Judicial) //SR 5