Cenvat credit on business-related insurance services remained admissible, and the amended input service rule could not operate retrospectively.

Cenvat credit on insurance services was treated as admissible where the services were used in relation to the business of manufacture. Insurance for plant and machinery, marine transit and cash-in-transit was covered because it was integral to manufacturing operations under the inclusive part of Rule 2(l). Employee group insurance was also allowed, as compliance with statutory employee-insurance requirements formed part of the manufacturing business. The amendment deleting the words activities relating to business was not shown to be clarificatory and could not be applied retrospectively to deny credit. The resulting position was that the disputed credit remained available and the retrospective disallowance failed.

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Issues: Whether Cenvat credit was admissible on insurance services used for plant and machinery, marine transit, cash-in-transit and employee insurance, and whether the amendment to the definition of input service in Rule 2(l) of the Cenvat Credit Rules, 2004 could be applied retrospectively to deny such credit.

Analysis: The Tribunal followed its earlier decision in the assessee's own case and held that the definition of input service is wide enough to include services used in relation to the business of manufacture, not merely services used directly or indirectly in or in relation to manufacture. Insurance of plant and machinery, goods in transit and cash in transit was treated as integral to manufacturing operations and therefore covered by the inclusive part of the definition. Employee group insurance was also treated as admissible, since compliance with statutory employee-insurance requirements was considered part of the manufacturing business. The Tribunal further held that the amendment deleting the phrase activities relating to business from Rule 2(l) was not shown to be clarificatory and could not be applied retrospectively to deny credit.

Conclusion: Cenvat credit on the disputed insurance services was admissible, and the retrospective disallowance based on the amended rule was unsustainable.

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