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2018 (10) TMI 269 - HC - Service TaxCENVAT Credit - input services - insurance services provided by the appellant to workers working at their site, as per the mandatory requirement of labour laws - denial of credit on the ground that the payment of insurance premium for availing the insurance policy stand excluded from the definition of “input services”, pursuant to the definition of “Input Services”, after 01.04.2011. Held that:- The Tribunal interpreted Clause (C) above and stated that in so far as the expression “and” used between two expressions “health insurance” and “Travel benefits” is disjunctive and is not required to be read along with the expression “health insurance”. - Further, it held that the exclusion clearly mentions various services, including life insurance and health insurance, as not covered by input services. It is further held that the travel benefits extended to the employees at the time of leave or home travel concession also stand excluded and therefore, there is no warrant to read excluded health insurance services with the travel benefits for leave etc. and the contention of the assessee that the health insurance services, which stand excluded are only which are extended during leave, cannot be accepted. The Tribunal missed a very significant point, while taking a decision as to whether the credit availed by the assessee is eligible or not ?. The first and foremost factor, which should have weighed the mind of the Tribunal is the nature of the policy availed by the assessee ; the beneficiary of the policy ; and the Statute, under which, the policy is required to be availed. These three are very important factors in the instant case. The inclusion of the Workmen's Compensation Act in the 1996 Act, a beneficial legislation, is for the purpose of protecting workmen, who generally belong to unorganized sector. The policy does not name the employees, but categorized the employees based on their vocation/skill. The insured is the assessee and the intention of the policy is to protect the employees, who work in the site and not to drive them to various forums for availing compensation in the event of an injury or death. Therefore, even viewed from this angle, the availment of the policy appears to be a statutory requirement and as rightly contended by the assessee, this service is not used primarily for personal use or consumption of an employee and this, being the statutory requirement, it is insured (assessee) specific and not employees specific. Thus, the Tribunal fell in error in dismissing the appeal filed by the assessee and equally the First Appellate Authority as well as the Original Authority failed to interpret the statutory provisions, in the manner it is required to be done. Appeal allowed - decided in favor of assessee.
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