Date – 17 August 2023

Parties: M/s. Diamond Beverages Private Limited Vs. Commissioner of CGST & CX, Kolkata South Commissionerate

Facts – 

• The Appellant, M/s. Diamond Beverages Private Limited received a Show Cause cum Demand Notice based on an audit objection alleging that Cenvat Credit was wrongly availed on motor vehicles and ‘rent a cab’ service and Employees Group Insurance, Health Insurance, Personal Accident Policy.
• The appellant contented that they were under the bona fide belief as regards admissibility of Cenvat Credit on motor vehicles and ‘rent a cab’ service and subsequently they reversed the entire credit the the employees who are not covered under E.S.I. Scheme are statutorily and mandatorily required to be covered under such insurance policies to eliminate risk factors of any unpleasant eventuality.
• The demand was confirmed along with interest and penalty. Being aggrieved, the appellant filed the appeal.

Issue –

• Whether the Cenvat Credit is available to appellant?

Order – 

• The Tribunal observed that Rule 2(l)(ii)(BA) & (C) of the Cenvat Credit Rules, inter alia excludes life insurance and health insurance from the purview/ambit of the definition of input service when such service is used primarily for personal use and consumption.
• The Tribunal in the case of BCH Electric Ltd. Vs. Commissioner of Central Excise, Delhi-IV [2013 (31) S.T.R. 68 (Tri.-Del.)] has observed that “the appellant cannot be accused of suppression of the relevant information as it is not the allegation of the department that the appellant in terms of legal requirements were required to give invoice-wise and item-wise details of Cenvat credit which they have not given. Therefore, only normal limitation period would be available to the department for recovery of ineligible Cenvat credit. “
• Hence the impugned order cannot be sustained and is accordingly set aside. The Appeal filed by the Appellant is allowed on limitation.