January 2012
(2011) 24 STR 272 (Kar.) — Commissionerr of Central Excise and Service Tax, LTU, Bangalore v. Micro Labs Ltd.
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Premium paid for employees’ health/medical insurance — CENVAT credit of service tax allowed — Input service should be utilised directly or indirectly in relation to the final product — Irrespective of the fact whether mentioned or not in the definition of input service in Rule 3 of the CENVAT Credit Rules, 2003 it amounted to input service.
Facts
The employer paid health insurance premium of the employees and claimed credit for the same. The adjudicating authority denied the credit. It was confirmed by the first Appellate Authority, however allowed by the Tribunal. The question for consideration was eligibility of the assessee to avail CENVAT credit towards payment of service tax on the Group Insurance Health Policy. The decision in the case of Commissioner v. Stanzen Toyotetsu India (P) Ltd., (2011) 23 STR 444 (Kar.) was referred to in which it was inter alia held that “the 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”.
Held
It was held that services such as transport facility provided to the employees and vehicle insurance pertaining to the same, workmen’s compensation and expenses relating to the same, even though not expressly mentioned in the definition of input service tantamount to input services and the Tribunal’s decision was held legal and valid.
