Court allows appeal, remands for verification. Service tax on group insurance for employees eligible under Labour Laws.

The appeal was allowed by the court, remanding the matter to the adjudicating authority for verification. The court held that service tax paid on the premium for group insurance policies for employees/workmen is eligible due to Labour Laws. However, the eligibility of premium paid for coverage extended to family members depended on whether a separate premium was required for their inclusion. The court also questioned the eligibility of premium paid for employees stationed in Chennai but working in Vadodara, necessitating further verification.

---

---

Issues involved:
1. Entitlement to avail credit of service tax paid on the Premium towards group Medical Insurance policy to employees and their families.

Analysis:
The appeal in question was directed against the order-in-appeal passed by the Commissioner of Central Excise (Appeals) Vadodara. The central issue at hand was whether the appellant was entitled to avail credit of service tax paid on the Premium towards group Medical Insurance policy for employees and their families. The appellant contended that as per Labour Laws provisions, ensuring employee insurance against workplace risks qualifies as an input service eligible for credit. Reference was made to judgments from the Hon'ble Karnataka High Court and various Tribunal cases to support this argument. The appellant also argued that no separate premium was paid for including family members in the insurance policy, contrary to the denial of credit by the authorities. On the other hand, the Ld. AR argued that no evidence was presented to establish that no additional premium was paid for family members' coverage.

Upon hearing both sides and examining the records, it was observed that service tax paid on the premium for group insurance policies for employees/workmen is eligible due to the mandatory requirement of Labour Laws. However, the eligibility of premium paid for coverage extended to family members depended on whether a separate premium was required for their inclusion. As the records did not clarify this aspect, the matter was remanded to the adjudicating authority for verification. Additionally, the eligibility of premium paid for employees stationed in Chennai but working in Vadodara was also questioned, necessitating further verification. Consequently, the appeal was allowed by way of remand to ascertain the facts regarding separate premium for family members and the eligibility of employees in Chennai for group insurance policy at their factory.

---