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2016 (3) TMI 1165 - AT - Central ExciseCENVAT credit - insurance premium paid for the health insurance of the employees of the factory - Held that - Exclusion of insurance service in certain events has been incorporated into the law w.e.f. 01.04.2011. That is only in respect of the insurance coverage given to employees during journey availing leave travel concession. But that had not taken away welfare of workers under the Factories Act from its fold if insurance service is availed to overcome difficulties under Workmen Compensation Act in case of hazard - credit allowed - appeal allowed - decided in favor of appellant.
Issues: Interpretation of CENVAT Credit Rules regarding insurance service and service tax paid for health insurance of factory employees.
Analysis: 1. The appellant claimed CENVAT credit for service tax paid on insurance service for the health insurance of factory employees. The appellant argued that the recent amendment disallowing CENVAT credit for insurance services does not apply to the situation at hand. 2. The Revenue contended that the appellant is not entitled to CENVAT credit for the service tax paid on insurance service due to the amendment to Rule 2 (l) of CENVAT Credit Rules, 2004 from 01.04.2014 onwards, which brought in certain contingencies. 3. The Tribunal heard both sides and examined the records to reach a decision. 4. The Tribunal noted that while the law excluded insurance services for certain events from CENVAT credit starting from 01.04.2011, it did not affect the welfare of workers under the Factories Act if insurance services were availed to address hazards under the Workmen Compensation Act. Thus, the Tribunal allowed the appellant's claim for CENVAT credit on the service tax paid for providing insurance services to factory employees. 5. Consequently, the appeal was allowed by the Tribunal. Conclusion: The Tribunal interpreted the CENVAT Credit Rules in the context of insurance services provided for factory employees' health insurance, allowing the appellant's claim for CENVAT credit despite the recent amendment disallowing such credit in certain circumstances.
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