The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) Mumbai on April 4th partly allowed an appeal filed by Mercedes Benz India Pvt. Ltd. by setting aside a penalty imposed on them due to erroneous claim of CENVAT CREDIT.
The Appellant went for appeal due to denial of CENVAT credit claim on input services of insurance used in respect of family members of their employees.
The Bench consisting of Technical Member Mr. Raju, understood that group insurance is mandatory only for the employees. There is no such mandatory provisions for their families. Thus, he observed that it was apparent that the said decisions have been given on the basis of erroneous assumption.
While setting aside the penalty, he further observed, “In so far as the imposition of penalty is concerned, it is seen that there can be a bonafide doubt in the mind of the appellant as it can be an issue of interpretation.”
