Cenvat credit for employee insurance premiums allowed where policies served labour-law compliance and workplace risk coverage.

Cenvat credit on service tax paid for group insurance and personal accident insurance was treated as admissible where the policies were taken for employee welfare and to satisfy labour-law compliance. The reasoning was that such insurance covers risks arising in the course of employment and falls within input services when linked to statutory labour obligations. The earlier view in the assessee's own case was followed, and no sufficient basis was found to depart from it. The denial of credit was therefore unsustainable.

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Issues: Whether Cenvat credit of service tax paid on group insurance and personal accident insurance premiums taken for employee welfare and labour-law compliance was admissible.

Analysis: The insurance policies were taken to cover risks arising in the course of employment and were linked to compliance with labour legislation. The earlier adjudication in the assessee's own case had allowed similar credit, and no sufficient basis was shown to depart from that view. Following the jurisdictional High Court's approach that insurance obtained for statutory labour compliance falls within the ambit of input services, the credit was held to be eligible.

Conclusion: The credit was admissible and the denial of Cenvat credit was unsustainable.

Ratio Decidendi: Insurance premiums paid for policies obtained to satisfy labour-law obligations and protect employees in the course of employment qualify as input services for Cenvat credit.

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