B.S.V. Murthy, Technical Member - The appellant has obtained centralised service tax registration under various service categories viz., Transport of Goods by Road, Maintenance or Repair Service, Commercial Training or Coaching, Scientific and Technical Consultancy, management Consultancy Service, Test Inspection and Certification, Manpower Recruitment Agency, Online Information and Data, Consulting Engineer, Erection, Commissioning or Installation, Public Relation Service, Advertising Space or Time, Sponsorship Service, Business Support Service, Renting of Immovable Property, Development and Supply of Content Services, Legal Consultancy, Business Auxiliary Service and Information Technology and Software Service. The appellant availed Cenvat credit on various input services including tax paid on group health insurance of employees and construction services availed at Mysore campus. Further the overseas branches of the appellant undertook several projects relating to software development etc., which were entrusted to overseas sub-contractors. The appellant received certain services outside the territory of India relating to data link and communication charges from foreign service providers, who were not licensed in terms of the provisions of section 4 of the Indian Telegraph Act, 1885. The department issued a show-cause notice dated 09.4.2010 proposing to deny Cenvat credit of Rs. 1,67,10,577/- on Employee Group Health Insurance and Cenvat credit of Rs. 9,47,02,918/- as pointed out in the audit enquiry dated 31.8.2009 for the period from April, 2006 to March, 2009. The issues relating to demand of tax under reverse charge mechanism on services received by overseas branches and data link charges etc. was not raised by the department in the said show-cause notice. The appellant contested the matter before the Commissioner of Service Tax, Bangalore, who passed an adverse order-in-original No. 85/2011 dated 27.4.2011 which is now in appeal before the Tribunal in ST/2045/2011.

2. There are three proceedings which have culminated into three impugned orders which are being considered together since some of the issues are common to all the three appeals. All the cases have been taken up for final hearing in view of the early hearing application filed by Revenue. The issues involved are briefly as under:

(a) The benefit of the service tax paid on premium paid for health insurance of employees as cenvat credit has been held to be irregular on the ground that the said service was received by the employees and not by the appellant and hence it could not be said to be an input service.

(b) It was also noticed that they had availed Cenvat credit on construction services/repair and maintenance services for Gym, hostel and Global Training Centre at Mysore. It was viewed that the said services were utilized for providing lodging facilities / recreational facilities/training to the trainees and in no way used for providing output service. Therefore Cenvat credit availed on these services is not admissible.

(c) The appellant had incurred expenditure in foreign currency towards the communication and data link charges which falls under category of Lease Circuit which was taxable from 18.4.2006 under Import of Service Rules, 2006.

(d) It was noticed that the appellant had incurred foreign exchange expenditure towards receipt of sub-contract services from overseas sub-contractor. The appellant had overseas branches and in case the clients of the appellant were in a country close to where these branches were located the appellant get the job done through these branches. The branches in turn used the service of sub-contractors and got the job done. The payments to the sub-contractors were done by the appellant through their EEFC account in foreign currency. According to Revenue, from the trail of transactions it was seen that the services were received by the appellant from the sub-contractors through their overseas branches and payments were received