Cenvat credit on employee insurance premium is admissible when the premium is paid to meet a statutory obligation.

Service tax paid on insurance premium relating to employees and workers was held eligible for Cenvat credit where the premium was incurred in compliance with the statutory requirement under Section 38 of the Employees State Insurance Act, 1948. The Tribunal noted that the issue was already covered by earlier decisions and treated the statutory obligation as sufficient to link the insurance expense with the business's eligible input service claim. Cenvat credit was therefore admissible, and the impugned order was set aside.

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Issues: Whether cenvat credit of service tax paid on insurance premium relating to employees and workers was admissible.

Analysis: The dispute concerned service tax paid on insurance premium for employees and workers during the relevant period. The Tribunal noted that the issue stood covered by earlier decisions and that the premium was paid in relation to employees and workers in the factory in compliance with the statutory requirement under Section 38 of the Employees State Insurance Act, 1948.

Conclusion: Cenvat credit was admissible and the impugned order was set aside.

Ratio Decidendi: Service tax paid on insurance premium relating to employees and workers, when incurred in compliance with a statutory obligation, is eligible for cenvat credit.

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