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2014 (4) TMI 948 - HC - Service TaxCENVAT Credit - Whether, the Tribunal was correct in allowing CENVAT Credit on Insurance Services for payment of Service Tax on output service viz., Manpower recruitment or Supply agency services’ wherein such services do not have any nexus for providing the output service and do not qualify as ‘input service’ as per Rule 2(1)(i) of CENVAT Credit Rules, 2004 - Held that:- In so far as Insurance coverage to the employees is concerned in the course of employment if the employees suffer injury or dies, there is a vicarious liability imposed on the employer to compensate the employee. If the employer employs its own transportation facility in order to cover the risk which also includes the risk of workers who are covered in that statutory establishment, he has to take the insurance policy without which the vehicle cannot go on the road. Under the Workmen’s Compensation Act he has to obtain the Insurance Policy covering the risk of the employees. The Employee State Insurance Act takes care of the health of the employees also and casts an obligation on the employer to provide insurance services. Under these circumstances, this Group Insurance Health Policy though is also a welfare measure is an obligation which is cast under the Statute that the employer has to obey. Section 38 of the Employees State Insurance Act, 1948, mandates that subject to the provisions of the Act, all employees in factories or establishments to which this Act applies shall be insured in the manner provided by this Act. May be the employees also have to contribute but the employer is under an obligation to take an Insurance policy and contribute his share. Therefore, the said Group Insurance Health Policy taken by the assessee is a service which would constitute an activity relating to business which is specifically included in the input service definition - Following decision of COMMISSIONER OF CENTRAL EXCISE, BAGNALORE v/s M/S. STANZEN TOYOTETSU INDIA (P) LTD., BANGALORE [2011 (4) TMI 201 - KARNATAKA HIGH COURT] - Decided against Revenue.
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