2010 (8) TMI 415 - AT - Service Tax

Stay of operation - Insurance cover for Directors and officers of the assessee-company which is meant for indemnification of the officials - against liability or claim which may arise during the course of any official action, is for official purpose which has nexus with their business activities - Held that - premium paid on the policies of insurance company will qualify as input service and that the assessees had correctly availed credit - insurance cover has nexus with the business activity or output service, namely, Trusteeship Services

Summary

The Appellate Tribunal CESTAT, Chennai rejected the stay application regarding insurance cover for Directors and officers of the assessee-company. The Commissioner (Appeals) held that the premium paid on the policies of insurance company qualifies as input service. The insurance cover has nexus with the business activity of "Trusteeship Services." The stay application was rejected.