2014 (1) TMI 506 - AT - Service Tax

Stay application - Availment of CENVAT Credit - Insurance premium paid by a labour contractor for the benefit of labourers employed by the respondent, and reimbursed by the respondent - Whether assessee a service recipient - Held that - insurance of labourers was essential for smooth functioning of the factory and therefore it constituted input service for the cement manufacturer. Insurance premium which was initially paid by the labour contractor and subsequently reimbursed to them by the cement manufacturer formed part of the cost of production of cement - Stay denied.

Summary

The Appellate Tribunal CESTAT BANGALORE rejected the Department's application to stay the operation of the Commissioner's order allowing Cenvat credit on insurance premium paid by a labour contractor for the benefit of labourers employed by the respondent. The appellate authority considered the insurance as an essential input service for the cement manufacturer, forming part of the cost of production of cement.