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September 2016

[2016-TIOL-1851-CESTAT-MUM] Bny Mellon International Operations India P. Ltd vs. Commissioner of Central Excise, Pune-III

By Puloma Dalal, Jayesh Gogri, Mandar Telang; Chartered Accountants
Reading Time 1 mins
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When premium on group insurance does not vary with the number of family members covered, entire service tax charged on such premium is available as CENVAT credit.

Facts
The Appellant an exporter of services filed a refund claim of the accumulated CENVAT credit under Rule 5 of the CENVAT Credit Rules, 2004. CENVAT credit of service tax paid on premium charged on group insurance scheme was disallowed on the ground that the said insurance also covered the family members of the employee which is not related to the output service.

Held
The Tribunal noted that the premium charged does not vary with the number of dependents who are additionally covered by the same insurance scheme. Accordingly even if none of the dependents were within the coverage, the premium amount would not alter or vary. Thus no part of premium is attributable to the extension of coverage to family members. Appeal is allowed and refund granted.

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