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2013 (12) TMI 266 - AT - Service TaxCENVAT Credit - premium for group insurance/mediclaim policy - Held that:- department’s allegation is that the appellant have taken Cenvat credit of service tax paid on the premium paid for group insurance/mediclaim/life insurance policies in respect of employees as per Annexure A to the show cause notice. Annexure A to the show cause notice also gives the details of the credit taken on the insurance services availed for the employees. In the show cause notice there is absolutely no allegation that the insurance cover provided by the appellant also covered the family members of the employees. In view of this, the original Adjudicating Authority and the 1st Appellate Authority, have gone totally wrong in travelling beyond the show cause notice. When the group insurance/mediclaim/life insurance cover to the employees of manufacturer is a requirement of Section 38 of the Employees State Insurance Act, 1948 and in this case it is not disputed that the provisions of this Act are applicable to the appellant, the appellant have to provide insurance cover as per the provisions of this Act to their employees failing which, they would face penal action. Therefore, the availment of the insurance services for providing insurance/mediclaim/life insurance has to be treated as an activity in or in relation to manufacture and would be covered by the definition of input service. In view of this, the impugned order is not sustainable - Decided in favour of assessee.
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