By TIOL News Service

NEW DELHI, APRIL 23, 2018: DURING the period December 2007 to March 2010, the appellant purchased group mediclaim policies from M/s New India Insurance Company Ltd. for the employees and their family members. The premium was paid by the appellant company and the service tax paid thereon was claimed as CENVAT credit.

The original authority denied the credit in its entirety but the Commissioner (Appeals) allowed the Cenvat credit in respect of the premium paid for the employees but not in respect of their family members.

Being aggrieved, the appellant is before the Tribunal.

The appellant submitted that the group insurance for the entire family is allowable as CENVAT credit per the ratio laid down in the case of Stanzen Toyotetsu India Pvt. Ltd. - 2009-TIOL-697-CESTAT-BANG upheld by the Karnataka High Court - 2011-TIOL-866-HC-KAR-ST. It is also informed that an identical issue has been decided in favour of the assessee in the case of M/s EXL Service Com (India) Pvt. Ltd. - 2017-TIOL-2394-CESTAT-DEL.

The AR placed reliance on the decision in Maruti Suzuki - 2017-TIOL-207-CESTAT-CHD and justified the denial of credit.

After distinguishing the decision cited by the AR, the Bench observed that in the case of M/s EXL Service (supra) the benefit of (service tax paid) in respect of the insurance to the family members has been allowed as CENVAT credit.

Therefore, the CESTAT observed -

"7. By following our earlier decision (supra), the premium paid on the group policy for the employees as well as their family members is allowable for the purpose of Cenvat credit. Moreover, the employee is earning not for himself but also for the family members."

The impugned order was set aside and the appeals were allowed.

(See 2018-TIOL-1289-CESTAT-DEL)