Broad input service interpretation supported interim relief on insurance-related CENVAT credit claims and stayed recovery pending appeal.

The definition of input service under Rule 2(l) of the CENVAT Credit Rules, 2004 was applied broadly, and services used for insurance of workers retiring under a voluntary retirement scheme, insurance of export goods, and insurance abroad for sale were treated as covered input services. On that basis, the applicant was held to have made out a prima facie case for interim protection, so the pre-deposit of the entire demand, interest, and penalties was waived and recovery of the demand was stayed during pendency of the appeal.

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Issues: Whether the services used for insurance of workers retiring under the voluntary retirement scheme, insurance of export goods, and insurance abroad for sale qualified as input services, and whether the demand, interest, and penalties should be waived and stayed during pendency of the appeal.

Analysis: The input service definition under Rule 2(l) of the CENVAT Credit Rules, 2004 was read broadly in the light of the cited High Court decision. On that basis, the services received were treated as covered by input services, giving the applicant a prima facie case in its favour for interim relief.

Conclusion: The requirement of the entire demand, interest, and penalties was waived and recovery of the demand was stayed during the pendency of the appeal.

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