Relief for Tata Teleservices: CESTAT Rules Group Mediclaim, Accident, and Vehicle Insurance Eligible for CENVAT Credit [Read Order]
CESTAT allowed Tata Teleservices' appeal, holding that mediclaim, personal accident, and vehicle insurance qualify as input services eligible for CENVAT credit.
![Relief for Tata Teleservices: CESTAT Rules Group Mediclaim, Accident, and Vehicle Insurance Eligible for CENVAT Credit [Read Order]](https://images.taxscan.in/h-upload/2025/08/13/2076459-tata-teleservices-taxscan.webp "Relief for Tata Teleservices: CESTAT Rules Group Mediclaim, Accident, and Vehicle Insurance Eligible for CENVAT Credit [Read Order]")
The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that group mediclaim for employees and their families, personal accident insurance, and vehicle insurance qualify as ‘input services’ under the CENVAT Credit Rules, 2004. Tata Teleservices (Maharashtra) Ltd., the appellant, availed CENVAT credit of Rs. 88,53,123 on service tax paid...
The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that group mediclaim for employees and their families, personal accident insurance, and vehicle insurance qualify as ‘input services’ under the CENVAT Credit Rules, 2004.
Tata Teleservices (Maharashtra) Ltd., the appellant, availed CENVAT credit of Rs. 88,53,123 on service tax paid towards these insurance services during 2007-08 to 2011-12. The department denied the credit, arguing that there was no statutory obligation to provide such insurance, and treated them as non-business, welfare expenses. The adjudicating authority confirmed the demand with interest and penalty.
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The appellant's counsel argued that the services were used in the course of business, and that group mediclaim and accident insurance were necessary for employees not covered under ESI. It was also submitted that vehicle insurance is a legal requirement. The counsel relied on decisions in Fiamm Minda Automotive Ltd. and Stanzen Toyotetsu India Pvt. Ltd., which allowed similar credits.
The revenue countered that the services lacked a direct nexus with output services and were not essential for business operations.
The two-member bench comprising C.J. Mathew (Technical Member) and Ajay Sharma (Judicial Member) observed that there was no finding suggesting that accident insurance covered activities beyond the workplace and no evidence to show that the vehicles were used for personal purposes.
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The tribunal also referred to the decision of the Larger Bench in PTC Software, which held that mediclaim insurance for employees and their families qualifies as input service and that it is not necessary to show a direct connection between the service and the manufacturing activity for the pre-2011 period.
The tribunal pointed out that insurance services used by the appellant fell within the inclusive scope of input services under Rule 2(l) of the CENVAT Credit Rules. It held that the appellant was entitled to credit on all three insurance categories. The order of the lower authority was set aside, and the appeal was allowed.
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