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2014 (9) TMI 877 - CESTAT CHENNAIBenefit of Cenvat credit scheme - Insurance service - Held that:- first part of the definition reads that “input service” means any service used by the manufacturer whether directly or indirectly, in or in relation to the manufacture of the final product. 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 worker 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 desruption of manufacturing lines and the employer may take insurance for arranging proper medical attendance for sick workman or other employees of the company. Therefore, the medical insurance in relation to the employees of the company are also within the broad definition of input service given at Rule 2(l) of the Cenvat Credit Rules, 2004. When there is a direct decision of a High Court [2013 (1) TMI 304 - GUJARAT HIGH COURT], on the particular service in question, it is only proper that the same is followed. Therefore, I follow the decision of the Hon’ble Karnataka High Court in this matter and hold that the Service Tax paid on such service which is attributable to insurance premium for employees will qualify to be taken as Cenvat credit. However, in the case of premium attributable to the families of employees it cannot have any direct nexus and will not qualify as input services. The impugned order is set aside and the matter is remanded back to the adjudicating authority to quantify the eligibility of Cenvat credit. - Decided partly in favour of assessee.
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