AstraZeneca India gets Partial Relief from CESTAT [Read Order]

In a recent ruling, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has allowed partial relief to the pharma giant, AstraZeneca India where the claim for refund in respect of service tax paid on hotel accommodation services and general insurance services were allowed in favor of the company.

The Company’s request to allow cenvat credit under various heads including hotel accommodation expenses, out-of-pocket expenses, and general insurance services was rejected by the department.

Allowing the plea of the Company, the Tribunal bench comprising Judicial Member Sulekha Beevi C.S found that the refund in respect of Hotel Accommodation Services is availed only for the benefit of the employees, and therefore, the same must be allowed in the light of the Company’s own case for the subsequent period.

“In regard to Out-of-Pocket Expenses, there are no sufficient documents showing the details of these expenses or the type of services that have been availed by the appellants. I am of the view that the appellant is not eligible for the refund of service tax paid on out-of-Pocket Expenses as they do not relate to any particular service,” the Tribunal said.

With regard to the General Insurance Services, the Tribunal found that the Company has produced documents to show that the premium has been borne by them and also to show that these are policies to meet the risk of payment of various legal benefits to employees.

“This said issue is covered by the decision in the case of M/s. ATP Tyres Vs. CGST & CE – 2021 (3) PMI 681 CESTAT- CHENNAI and M/s. CMR Engineering Ltd., – 2019 (8) TMI 748 – TELANGANA and ANDHRA PRADESH. Following the above decisions, I hold that the refunds in respect of the two services are eligible. The appeal is partly allowed. The impugned order is set aside to the effect of allowing the refund in respect of Hotel Accommodation Services and General Insurance Services only. Rejection of refund in respect of Out-of-Pocket Expenses is upheld. The appeal is partly allowed with consequential reliefs if any,” the Tribunal concluded.

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