Cenvat credit on group mediclaim premium for employees and family members upheld as an eligible welfare-related business input.

Cenvat credit was allowed on premium paid for a group mediclaim policy covering employees and their family members because the insurance formed part of employee welfare in the course of business and there was no contractual exclusion distinguishing the family members' cover. The Tribunal held that the premium for the entire group policy qualified as an eligible input service benefit, and the denial limited to the family members' portion was unsustainable. The assessee was therefore entitled to full credit on the insurance premium.

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Issues: Whether Cenvat credit is admissible on the premium paid for group mediclaim insurance covering employees and their family members.

Analysis: The disputed credit related to group insurance taken for employees and their family members. The denial was confined to the family members' portion, but the record showed no contractual exclusion or other basis to distinguish that part from the cover provided to employees. Relying on the earlier view that such insurance forms part of the welfare-related benefit extended in the course of business, the Tribunal held that the premium paid for the group policy was eligible for Cenvat credit.

Conclusion: Cenvat credit on the premium paid for group mediclaim insurance for both employees and their family members was admissible, and the denial was set aside in favour of the assessee.

Final Conclusion: The appeals succeeded and the assessee was entitled to the full credit claimed on the group insurance premium.

Ratio Decidendi: Premium paid for a group mediclaim policy covering employees and their family members qualifies for Cenvat credit where the insurance is part of employee welfare and is not contractually excluded from business-related benefits.

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