CENVAT credit on group insurance premium allowed where family coverage did not alter the premium and was business-related.

Service tax paid on premium for a group insurance policy covering employees and their family members was treated as eligible CENVAT credit where the premium did not change with the inclusion of dependents. Because no separate portion of the premium could be attributed to family coverage, the full amount was regarded as relatable to the assessee's business and as an eligible input service. Revenue's contrary authorities were distinguished on that factual basis, and the earlier Tribunal view following High Court authority was applied. The insurance premium was therefore eligible for CENVAT credit, and refund of accumulated credit could not be denied.

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Issues: Whether service tax paid on premium for a group insurance policy covering employees and their family members was eligible for CENVAT credit refund where the premium did not vary with the number of dependents covered.

Analysis: The premium payable under the family floater/group insurance scheme remained the same irrespective of whether dependents were included in the cover. Since no part of the premium could be separately identified or attributed to the extension of coverage to family members, the amount paid was treated as wholly relatable to the assessee's business and as an eligible input service. The authorities cited by the revenue were distinguished on this factual basis, and the reasoning in the earlier Tribunal decision following High Court authority was applied.

Conclusion: The insurance premium was eligible for CENVAT credit and the refund of accumulated credit could not be denied.

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