COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX Vs. MICRO LABS LTD.

JUDGEMENT

(1.) This appeal is by the revenue being aggrieved by the order of the Tribunal which held that the Assessees are liable to avail CENVAT credit towards service tax paid on Group Mediclaim Policy premium.

(2.) The Assessees are engaged in the manufacture of medicaments and are holders of Central Excise Registration. On scrutiny of the records by the authority it was seen that they had availed CENVAT credit for payment made towards Group Mediclaim Policy premium. Accordingly, a show-cause notice was issued as to why the CENVAT credit availed by the Assessees towards payment of Group Mediclaim Policy premium should not be demanded and recovered since in was irregularly availed by them and also as to why the penalty and interest should not be imposed. After submitting the reply the assessing authority confirmed the demand, penalty and interest. Aggrieved by the same, an appeal was preferred to the Commissioner who confirmed the order of the assessing authority and dismissed the appeal. Aggrieved by the same the Assessees preferred an appeal before the Tribunal. The Tribunal by placing reliance in the case of Stanzen Toyotetsu India (P.) Ltd. v. CCE, 2009 21 STT 321 (Bang. - CESTAT) held that the Assessees are entitled to avail CENVAT credit of the service tax paid on Group Mediclaim Policy premium. Hence, the present appeal by the revenue.

(3.) The question for consideration therefore is as to whether the Assessees are liable to avail CENVAT credit towards payment of service tax on the Group Insurance Health policy. An identical question came up for consideration before the Division Bench in CEA 96/2009 and connected matters which were disposed off on 8-4-2011. The question considered therein was as to whether the Assessees are entitled to claim CENVAT credit for the service tax paid on Insurance/Health Insurance policy. The Division Bench held that insofar as Insurance coverage to the employees is concerned in the course of employment if the employees suffer injury or dies, there is a vicarious liability imposed on the employer to compensate the employee. If the employer employs its own transportation facility in order to cover the risk which also includes the risk of workers who are covered in that statutory establishment, he has to take the insurance policy with which the vehicle cannot go on the road. Even for entering into the premises to meet the obligations under the Workmen's Compensation Act he has to obtain the Insurance Policy covering the risk of the employees. The Employee State Insurance Act takes care of the health of the employees also and casts an obligation on the employer to provide insurance services. Under these circumstances, this Group Insurance Health Policy though is also a welfare measure is an obligation which is cast under the Statute that the employer has to obey. Section 38 of the Employees State Insurance Act, 1948, mandates that subject to the provisions of the Act, all employees in factories or establishments to which this Act applies shall be insured in the manner provided by this Act. May be the employees also have to contribute but the employer is under an obligation to take an Insurance policy and contribute his share. Therefore, the said Group Insurance Health Policy taken by the Assessee is a service which would constitute an activity relating to business which is specifically included in the input service definition.