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2016 (8) TMI 723 - AT - Service TaxCenvat credit - insurance premium having been paid for the health insurance of the employees of the factory and Pest Control Service availed to protect the property of the company - Held that - so far as the Cenvat credit on insurance service is claimed, the exclusion of such service in certain events has been incorporated into the law with effect from 1-4-2011. 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 s Compensation Act, in case of hazard. Accordingly, appellant s claim of Cenvat credit on the service tax paid to avail insurance service for employees employed in factory is permissible. Pest Control to maintain property of the assessee being integral to the protection of the business, therefore, appellant is also entitled to credit thereon. - Decided in favour of appellant
Issues:
1. Entitlement to Cenvat credit on insurance premium paid for health insurance of factory employees. 2. Eligibility for Cenvat credit on service tax paid for Pest Control Service to protect company property. Analysis: 1. The appellant claimed Cenvat credit on the service tax paid for insurance service availed for the health insurance of factory employees. The Revenue argued that the recent amendment to Rule 2(1) of Cenvat Credit Rules, 2004, effective from 1-4-2014, disallows Cenvat credit in certain circumstances. However, the appellant contended that the amendment only excludes insurance coverage for employees during journey under leave travel concession, not for welfare purposes under the Factories Act. The Tribunal agreed with the appellant, stating that if insurance service is availed to overcome hazards under the Workmen's Compensation Act, the Cenvat credit is permissible. Hence, the appellant was entitled to Cenvat credit on the insurance service. 2. Regarding the Pest Control Service availed to protect the company's property, the Revenue argued that it was not connected to the business, and thus, no Cenvat credit on the service tax paid could be claimed. However, the Tribunal disagreed, emphasizing that pest control to maintain the property of the assessee is integral to protecting the business. Therefore, the appellant was deemed eligible for Cenvat credit on the service tax paid for Pest Control Service. Consequently, the appeal was allowed, and the appellant's entitlement to Cenvat credit on both insurance service and Pest Control Service was upheld.
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