"CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL MUMBAI WEST ZONAL BENCH SERVICE TAX APPEAL NO: 90144 OF 2014 [Arising out of Order-in-Original No: 81/ST-II/RS/2014 dated 09th September 2014 passed by Commissioner of Service Tax, Mumbai-II.] Tata Teleservices (Maharashtra) Ltd D-26/2 TTC Industrial Area, MIDC, Sanpada, Turbhe, Navi Mumbai 400 703. … Appellant versus Commissioner of Service Tax Mumbai-II New Central Excise Bldg., Maharshi Karve Road Churchgate, Mumbai 400 020. …Respondent APPEARANCE: Shri Sanjeev Nair, Advocate for the appellant Shri Adeeb Pathan, Deputy Commissioner (AR) for the respondent CORAM: HON’BLE MR C J MATHEW, MEMBER (TECHNICAL) HON’BLE MR AJAY SHARMA, MEMBER (JUDICIAL) FINAL ORDER NO: 86240/2025 DATE OF HEARING: 13/02/2025 DATE OF DECISION: 12/08/2025 PER: C J MATHEW This appeal of M/s Tata Teleservices (Maharashtra) Ltd, directed 2 ST/90144/2014 against order1 of Commissioner of Service Tax, Mumbai-II confirming proposal for recovery of ₹ 88,53,123 taken as CENVAT credit under rule 14 of CENVAT Credit Rules, 2004, along with appropriate interest under section 75 of Finance Act, 1994, while imposing penalty of like amount under rule 15 of CENVAT Credit Rules, 2004, rests on binding precedent insofar as eligibility of the three ‘input services’ is concerned. 2. It is seen from the records that the demand pertains to 2007-08 to 2011-12 during which appellant had taken credit of tax component in the premium paid for policies insuring employees against accident at workplace, insuring employees and families through group ‘mediclaim’ and insuring of vehicles. Relying on the broad principles for segregation of taxable services utilized in connection with the business which, for the appellant, was rendering of ‘telecom services’, the adjudicating authority was convinced that, with lack of any statutory obligation devolving on the appellant to obtain insurance for the employees and their families, entitlement of CENVAT credit was not a matter of right. Of the credit taken, ₹ 82,56,303 pertains to tax paid on group ‘mediclaim’ policy while ₹ 46,262 and ₹ 1,34,199 pertain to personal accidental insurance policies and vehicle insurance respectively. We also note that that there is no finding on the manner in which vehicle insurance would not be ‘input service’ in accordance 1 [order-in-original no. 81/ST-II/RS/2014 dated 09th September 2014] 3 ST/90144/2014 with rule 2(l) of CENVAT Credit Rules, 2004 but entitlement thereof was denied along with the other two. 3. We have heard Learned Counsel for the appellant and Learned Authorized Representative. 4. The issue of entitlement to avail CENVAT credit of tax discharged on procurement of insurance coverage for employees is no longer res integra inasmuch as several decisions of the Tribunal have settled the entitlement there of and it was held, in Fiamm Minda Automotive Ltd v. Commissioner of Central Excise, Delhi-III [2011 (22) STR 210 (Tri - Del)], that ‘3. On each of the disputed items, the submissions of both sides and the findings are recorded as follows:- (a) Group insurance/mediclaim policy (i) The party is aggrieved that the credit of the service tax paid on mediclaim insurance and group insurance policy taken for their employees/staffs who are not covered by the ESI has been disallowed. This has been disallowed on the ground that the same cannot be considered as input service in terms of the activities relating to business. (ii) Learned Authorised Representative for the company submits that in respect of category of employees and officials who are not covered by the ESI, they are required to make compensation in the event of illness/accident. As a prudent business proposition, they 4 ST/90144/2014 incurred expenses by taking mediclaim insurance and personal accident insurance and these expenditures are clearly in the course of business activities covering possible risks involved which may result in payment of huge sum. Such an approach is part of business activities and therefore this should be treated as input service. He relies on the decision of the Tribunal in the case of Stanzen Toyotetsu India Pvt. Ltd. v. CCE, Bangalore reported in 2009 (14) S.T.R. 316 wherein the credit of service tax paid on group insurance and health policy for the employees and the workers have been allowed. (iii) Learned SDR submits that it is not mandatory for the appellants to take mediclaim policy and accident policy for their employees and the same is only a welfare measure and therefore cannot be treated as having nexus with the business activities and held to be input service. He relied on the decision of the Tribunal in the case of H.E.G. Ltd. v. CCE, Raipur reported in 2008 (9) S.T.R. 372 (T) = 2008 (223) E.L.T. 212. (iv) I have carefully considered the submissions from both the sides and perused the records. I find that the division bench of the Tribunal in the case of Stanzen Toyotetsu India Pvt. Ltd. has allowed the credit in respect of the service tax paid on group insurance and health policy for the employees and workers. Therefore, I hold that there is a merit in the appeal filed by the appellant. The appeal on this issue is, therefore, allowed. xxxx’ There is no finding that accident coverage has been taken for persons 5 ST/90144/2014 and episodes beyond the workplace. It, therefore, has to be presumed that ₹ 46,262 taken as credit thereto is towards eligible ‘input service’ and not to be disallowed. 5. Though the adjudicating authority has not rendered any finding on the ineligibility of credit of ₹ 1,34,199 taken on insurance of vehicles, there is nothing on record to suggest that the vehicles had been deployed for activities other than the business activities of the appellant. Moreover, vehicles are statutorily mandated to be insured and denial of the credit thereof is not in consonance with the intent of CENVAT Credit Rules, 2004 6. On the issue of group ‘mediclaim’ policy, which was, admittedly, extended to the families of employees, the division bench had referred for constitution of Larger Bench of the Tribunal and which, by interim order2 in the present dispute before us, held that ‘49. It has been found as a fact in the present case that the appellant is entitled to avail CENVAT credit of the service tax paid on the insurance premium for the employees and their family members in terms of the definition of ‘input service’ contained in rule 2(l) of the Credit Rules. The aforesaid judgment of the Supreme Court, therefore, would not come to the aid of the Department. 50. The decision of the Tribunal in PTC Software correctly holds that CENVAT credit of the service tax paid for procuring 2 [no. 05/2024 dated 18th March 2024] 6 ST/90144/2014 insurance for the family members of the employees can be availed. The decisions to the contrary do not lay down the correct position in law. 51. Thus, in view of the aforesaid discussion, it has to be held that CENVAT credit of the service tax paid on the insurance premium paid for the family members of the employees would also be admissible. 52. The answer to the reference made to the Larger Bench is as follows: “The appellant would be entitled to avail CENVAT credit of the service tax paid by the appellant on the insurance premium paid for procuring insurance services for the employees and their family members, as the said service would be an ‘input service’ under rule 2(l) of the CENVAT Rules, both under the main limb of the definition as also under the inclusive limb of the definition. It is not necessary for the appellant to establish an integral connection between the service and business of manufacture for the said service to be categorized as ‘input service’ under rule 2(l) of the CENVAT Rules for the period prior to 01.04.2011.”’ Consequently, the demand from the finding of ineligibility is not sustainable. 7. In view of the above, the impugned order is set aside to allow the appeal. (Order pronounced in the open court on 12/08/2025) (AJAY SHARMA) Member (Judicial) (C J MATHEW) Member (Technical) */as "