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2016 (4) TMI 370 - AT - Central ExciseEligibility of Cenvat credit - Service tax paid on Health Insurance Services for the coverage of employees, spouse, dependent children and parents etc. - Department contended that the impugned service is not covered under the definition of the input service vide Rule 2(l) of Cenvat Credit Rules, 2004, Held that:- it is found that when employees are at work in the factory, if an accident happens, the employer is liable to pay compensation and a prudent businessman will be interested in taking an accident insurance policy for his workers to cover the business risk and it cannot be considered that such insurance is not relation to the manufacturing activity. Even in the case of health insurance of the workmen, when employees fall sick, it is necessary that they are provided proper treatment so that they are brought back to work without loss of man hours and disruption of manufacturing lines and the employer may take insurance for arranging proper medical attendance for sick workman or other employees of the company. In the case of premium attributable to the families of employees it cannot have any direct nexus and will not qualify as input services. By following the judgment of Hon’ble High Court of Karnataka in the case of CCE, Bangalore-III Vs. Stanzen Toyotetsu India (P) Ltd. [2011 (4) TMI 201 - KARNATAKA HIGH COURT], the medical insurance in relation to the employees of the company are within the broad definition of input service as per Rule 2(l)ibid. Hence, the impugned order is set aside. - Matter remanded back
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