S.S. Garg ORDER
S.S. Garg, Member (J)
1. The present appeal is directed against the impugned order dated 30.6.2014 passed by the Commissioner (A), whereby he has rejected the appeal of the appellant.
2. Briefly the facts of the case are that the appellant is a 100% EOU engaged in the manufacture and export of pharmaceutical products issued with private bonded warehouse and IBM sanction order dated 11.6.2004. The appellants availed CENVAT credit of excise duty paid on their input and service tax paid on their input services. Appellant availed CENVAT credit of service tax paid on input services viz., general insurance, canteen service and group medical and health insurance service. The appellant filed a refund application for Rs. 21,06,241/- based on the Orders-in-Appeal No. 380-381/2012 CE for the period April 2007 to September 2008. The adjudicating authority rejected the refund on some input services in the original adjudicating proceedings. Appellant preferred an appeal before the Commissioner (A) who passed order giving partial relief and remanded the case back to the original adjudicating authority. The adjudicating authority passed order granting partial relief against which the appellant filed appeal once again before the first appellate authority i.e. for the second time and the Commissioner (A) concurred with the views of the adjudicating authority and rejected the appeal of the appellant by holding that the refund claim for Rs. 1,29,612/- availed on input services for the period April 2007 to September 2008 is inadmissible pertaining to insurance service and catering services and also rejected the refund for Rs. 6,97,971/- pertaining to employees health insurance services and is not related to manufacturing activity. Aggrieved by the said order, the appellant has filed the present appeal.
3. Heard both the parties and perused the records.
4. The learned counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without correctly interpreting the definition of input service as contained in Rule 2(1) of CENVAT Credit Rules (CCR), 2004. He further submitted that the disputed services fall in the definition of input services and the same has been held in number of decisions rendered by the higher judicial fora. He further submitted that in the case of canteen services (outdoor catering services), the food is provided to the employees. He also submitted that it is a statutory requirement under the labour laws to maintain canteen facilities and it is indirectly related with the manufacturing of the final products. He further submitted that the learned Commissioner (A) has wrongly held that there should be more than 250 employees for availing the CENVAT credit on canteen services. He also submitted that now by various decisions of the Tribunal and the High Court has held that there is no necessity of having 250 employees for claiming CENVAT credit on canteen services. Therefore, I hold that canteen services fall in the definition of input service and the appellant is entitled to claim refund of CENVAT credit in respect of outdoor catering services. Further, the appellant is situated at a remote area in the industrial estate and therefore, it is all the more important to provide the canteen facilities to the employees. He also submitted that as per the Board's Circular No. 120/1/2010-ST : MANU/DSTX/0002/2010 dated 19.1.2010, there cannot be a different yardstick for establishing the nexus for taking of credit and for refund of credit. Similarly with regard to refund of CENVAT credit of service tax on general insurance services and employees group medical and health insurance services, the learned counsel submitted that all these services are held to be input services as there is a mandatory requirement under the labour law to take insurance policies and for this submission, he relied upon the following decisions:
i. CCE, Bangalore vs. Stanzen Toyotetsu India Pvt. Ltd.: MANU/KA/0835/2011 : 2011-TIOL-866-KAR-ST
ii. CCE, LTU, Bangalore vs. Micro Labs Ltd.: 2011-TMI-204-470-KAR-HC
iii. Millipore India Pvt. Ltd. vs. CCE, Bangalore: 2010-TIOL-1794-CESTAT-BANG.
iv. Hindustan Zinc Pvt. Ltd. vs. CCE: 2010-TIOL-1794-CESTAT-BANG.
4.1 He further submitted that the entire period involved in this case is prior to the amendment in the input service definition and prior to the amendment, the scope of input service was very wide and it included any service which is in relation to the business of the assessee and this wide interpretation was given in the case of CCE vs. Ultra Cement India Ltd.: MANU/MH/1408/2010 : 2010 (260) ELT 369. Further, with regard to rejection of refund claim amounting to Rs. 5,66,916/- being time barred is concerned, the learned Commissioner(A) upheld the order of the adjudicating authority. In fact in the first round of litigation, the learned Commissioner (A) while relying on the decision of the Hon'ble High Court of Karnataka in the case of mPortal Wireless Solutions Pvt. Ltd. vs. CCE: 2011-TIOL-928-HC-KAR held that insofar as refund of CENVAT credit is concerned, the limitation under Section 11B does not apply for accumulated CENVAT credit. Therefore, the bar of limitation cannot be a ground to reject CENVAT credit to the assessee. Learned counsel submitted that the time period prescribed in Section 11B for claiming refund of unutilized CENVAT credit does not apply to the refund claim under Rule 5. In reply to this, the learned AR submitted that as per the judgment of the Hon'ble Supreme Court in the case of Mafatlal Industries Ltd.: MANU/SC/1203/1997 : 1997 (89) ELT 247 (SC) and subsequently clarified by the Hon'ble Supreme Court in Anam Electricals Manufacturing Co.: MANU/SC/1205/1997 : 1997 (20) ELT 260 (SC) and also by Hon'ble High Court of Karnataka in the case of MCI Leasing (P) Ltd., Mysore: 2012-TIOL-54-HC-KAR-ST, have held that for every kind of refund, the time limit as prescribed under Section 11B is applicable.
5. After considering the submissions of both the parties, I am of the considered view that refund of Rs. 5,66,916/- is time bared as held in the impugned order and with regard to the remaining refund of Rs. 2,60,487/-, the appellant is entitled to the refund of the same being refund rejected on input services with regard to outdoor catering service, general insurance and employees health insurance. Therefore the appeal is partially allowed.
(Order was pronounced in Open Court on 30/01/2017.)
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