Appeal granted for waiver & stay of adjudged dues on service tax due to CENVAT credit eligibility for insurance service.

The appeal for waiver and stay of adjudged dues regarding the demand of service tax, stemming from the denial of CENVAT credit on insurance service, was allowed. The Appellate Tribunal, following the precedent set by a High Court judgment, recognized insurance service as an input service eligible for CENVAT credit. Consequently, the impugned order was set aside, and the appeal was granted in favor of the appellant, leading to the waiver and stay of the adjudged dues.

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Issues involved: Appeal for waiver and stay of adjudged dues regarding demand of service tax based on denial of CENVAT credit on insurance service.

Analysis:
1. The appeal was filed seeking waiver and stay of the adjudged dues related to a demand of service tax amounting to over Rs.74.7 lakhs for the period from April 2007 to September 2010, arising from the denial of CENVAT credit on insurance service. The appellant, a Manpower Recruitment or Supply Agency Service, had obtained insurance coverage for recruited personnel. The impugned demand was based on the total insurance premium paid by the appellant for the relevant period.

2. The Hon'ble High Court of Karnataka in the case of CCE, Bangalore-III Vs. Stanzen Toyotetsu India (P) Ltd. [2011(23) STR 444 (Kar.)] had considered a similar issue. The court held that the insurance policy taken by the assessee was a service constituting activity relating to business and thus an input service under Rule 2(l) of the CENVAT Credit Rules, 2004. The judgment was accepted by the Department, establishing a precedent in this regard.

3. Considering the precedent set by the High Court judgment, the Appellate Tribunal set aside the impugned order and allowed the appeal. The substantive issue was already covered by the High Court's decision, leading to the disposal of the stay application as well.

4. In conclusion, the appeal was disposed of in favor of the appellant based on the precedent established by the High Court judgment, which recognized the insurance service as an input service eligible for CENVAT credit. The Appellate Tribunal's decision aligned with the legal interpretation provided by the High Court, resulting in the waiver and stay of the adjudged dues in this case.

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