2018 (7) TMI 914 – CESTAT CHENNAI – TMI – CENVAT Credit – various input services – Group Health Insurance – Convention Service – Construction Service – Air-conditioner maintenance service – rent-a-cab service – Held that:- The Tribunal as well as High Courts have held in a number of decisions that services like Group Health Insurance, Convention Service, Construction Service, Air-conditioner maintenance service and rent-a-cab service are eligible for credit prior to 1.4.2011 – the credit availed on this input service for the period prior to 1.4.2011 are eligible for credit as per the definition of input service as it stood prior to 1.4.2011 – credit allowed.
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Group health insurance – Held that:- Since the appellant has more than 600 employees, it is mandatory for them to take insurance coverage for their employees. The exclusion clause in the definition of input service excludes such kind of insurance which is taken for an employee during the leave travel allowance and it does no
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The credit is allowed on this service.
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coating service (job work) – Held that:- Notification No.25/2012 dated 20.6.2012 came into force with effect from1.7.2012 which exempted service tax on such processing work done by the job worker. The authorities below have relied upon this notification to disallow the input service tax credit – however, these services have been availed prior to 1.7.2012 and therefore the disallowance of credit by the authorities below relying upon the notification is incorrect and unjustified – credit allowed.
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Air-conditioner maintenance service – Held that:- The Tribunal in the case of Sarita Handa Exports (P) Ltd. [2016 (7) TMI 554 – CESTAT CHANDIGARH] has held that credit is eligible for services availed for maintenance of air-conditioner. Further, the inclusive part of the definition of input service mentions that the services availed for repair and maintenance is eligible for credit – credit allowed.
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Appeal allowed in part and part matter
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as under:- Appeal No. Period of Dispute Input Service E/40341/2018 6/2010 to 4/2011 Group Health Insurance (1,38,823) Convention Service (2,600) Commercial construction (5,354) Penalty (1,46,237) E/40342/2018 10/2011 to 3/2012 Commercial Construction (8,10,854) Rent a cab service (4,392) E/40344/2018 10/2011 to 3/2012 Commercial Construction (1,68,839) Coating Service (job work) (23,756) E/40344/2018 7/2011 to 9/2011 Commercial Construction (8,37,412) Coating Service (job work) (14,341) E/40345/2018 5/2011 to 4/2012 Air Conditioner Maintenance (9,756) Commercial Construction (11,67,230) E/40346/2018 4/2008 to 4/2011 Air Conditioner maintenance (35,276) Group Health Insurance (4,26,159) Commercial Construction (8,83,324)Penalty (13,44,759) 3.1 He submitted that the period involved in Appeal No.E/40341/018 and E/40346/2018 are both prior to 1.4.2011. In respect of group health insurance services, ld. counsel argued that in respect of demand in Appeal No.E/40341/2018, all the invoices exc
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He adverted to page 11 of the Order-in-Original and submitted that the credit stands disallowed by the authority stating that the appellant has not produced any supporting documents. The appellant had made relevant entries giving the details of the service provider in their accounts. As per proviso to Rule 9, the AC/DC is required to verify and satisfy as to whether credit availed is correctly accounted and then allow the credit if it is properly accounted by the assessee. He therefore requested that the matter maybe remanded to the adjudicating authority to verify whether credit has been properly availed by the appellant. 3.3 With regard to commercial construction service, he submitted that the services were availed prior to 1.4.2011. He submitted that in two appeals which are stated above, the said services were availed prior to 1.4.2011. With regard to other four appeals, the construction services were availed only for repair and maintenance, modernization and renovation of the pre
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lant is eligible for credit. 3.6 Service tax paid on air-conditioner maintenance service has been rejected for the reason that these services have no nexus with the manufacturing activity. He submitted that it is necessary to maintain the air-conditioner which have been installed in the appellant s factory. He relied upon the decision in the case of Sarita Handa Exports (P) Ltd. Vs. Commissioner of Central Excise, Gurgaon – 2016 (44) STR 654 (Tri. Chan.). 3.7 He prayed that the issues relating to convention service, commercial construction service may be remanded and the credit in respect of other services may be allowed. 4. The ld. AR Shri S. Govindarajan supported the findings in the impugned order. He submitted that the group insurance services are not eligible for credit since they are not related to the manufacturing activity of the appellant. He relied upon the decision of the Tribunal in the case of Hindustan Petroleum Corporation Vs. Commissioner of Central Excise, Mumbai- 2018
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s activities relating to business . The Tribunal as well as High Courts have held in a number of decisions that services like Group Health Insurance, Convention Service, Construction Service, Air-conditioner maintenance service and rent-a-cab service are eligible for credit prior to 1.4.2011. In respect of Group Health Insurance in Appeal No. E/40341/2018, ld. counsel has submitted that except one invoice all the invoices relate to the period prior to 1.4.2011. I hold that the credit availed on this input service for the period prior to 1.4.2011 are eligible for credit as per the definition of input service as it stood prior to 1.4.2011. 6.1 With regard to group health insurance, the ld. counsel has submitted that the said services were availed for taking insurance coverage for the employees. Since the appellant has more than 600 employees, it is mandatory for them to take insurance coverage for their employees. The exclusion clause in the definition of input service excludes such kind
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orkers under the Factories Act, from its fold if insurance service is availed to overcome difficulties under Workmen s Compensation Act, in case of hazard. Accordingly, appellant s claim of Cenvat credit on the service tax paid to avail insurance service for employees employed in factory is permissible. Following the same, I hold that the group health insurance service prior to 1.4.2011 as well as after 1.4.2011 is eligible for credit. 6.2 With regard to rent-a-cab service, the ld. counsel has submitted that the said services are not used for activities relating to manufacture. The demand in respect of rent-a-cab service in Appeal No. E/40342/2018 is upheld along with interest and the penalties thereof. 6.3 The ld. counsel has submitted that commercial construction service were availed n Appeal Nos. E/40342/2018, E/40343/2018, E/40344/2018 and E/40345/2018 for the purposes of modernization and renovation of the factory and office premises. He submitted that the appellant would be able
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llowance of credit by the authorities below relying upon the notification is incorrect and unjustified. I hold that the credit availed on coating service (job work) is eligible. 6.6 The appellant is aggrieved by the disallowance of credit on air-conditioner maintenance service. It is submitted by him that it is absolutely necessary to avail the said services for the purpose of upkeep and maintenance of air-conditioner. The Tribunal in the case of Sarita Handa Exports (P) Ltd. (supra) has held that credit is eligible for services availed for maintenance of air-conditioner. Further, the inclusive part of the definition of input service mentions that the services availed for repair and maintenance is eligible for credit. For these reasons, I hold that disallowance of credit on air-conditioner maintenance service is unjustified and requires to be set aside, which I hereby do. 7. From the above discussions, I hold that:- (a) Group health insurance service, coating service (job work), commer
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