2018 (5) TMI 1034 - AT - Central Excise

CENVAT credit - insurance premium for policy taken on workers - Held that - The specific exclusion prescribed by Rule 2(l) of CENVAT Credit Rules, 2004 does not cover when the inputs are utilized for safety of employee under a statutory obligation - Workmen compensation is liability under the Labour Law. Insurance service availed to protect workmen has direct nexus to the manufacturing activity of the appellant since appellant is engaged in the manufacture of explosives - credit allowed - appeal allowed - decided in favor of appellant.

Summary

The Appellate Tribunal CESTAT Mumbai allowed the appeal stating that Service Tax paid on insurance premium for workmen compensation is admissible as CENVAT credit, as it is related to the safety of employees under a statutory obligation. The decision followed the precedent set in the case of FIEM Industries Ltd. Vs. CCE, Chennai-III 2016 (43) STR 470 (Tri-Chennai).