Input service coverage for vehicle insurance used in business activity supported waiver of pre-deposit and stay of recovery.

Service tax paid on insurance for cars used by company executives and officers was treated, on a prima facie basis, as an input service because the definition extends to services used in activities relating to business. The Revenue's objection that the cars were only an administrative facility and lacked nexus with manufacture or clearance was not accepted at the interim stage, and the tribunal held that vehicle insurance connected with business use could qualify for input service treatment. Pre-deposit was waived and recovery stayed pending disposal of the appeal.

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Issues: Whether service tax paid on insurance charges for cars purchased for use by company executives and officers could be treated as input service for the purpose of interim waiver of pre-deposit and stay of recovery.

Analysis: The appellant claimed that the definition of input service is wide enough to cover services used in activities relating to business, and that vehicle insurance was necessary for business use of the cars. The Revenue opposed the claim on the ground that the cars were only a facility for administrative staff and had no direct or indirect nexus with manufacture or clearance of excisable goods. On a prima facie view, insurance of vehicles used for business activity could be treated as input service.

Outcome: Pre-deposit of the dues was waived and recovery was stayed till disposal of the appeal.

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