CENVAT credit on employee insurance premium was denied because the amended input service rule expressly excluded such coverage.

CENVAT credit on service tax paid for insurance premium under an employee-linked Nagrik Suraksha Policy was held inadmissible because, after 1 April 2011, Rule 2(l) expressly excluded life insurance and health insurance services used primarily for employees' personal use or consumption. The policy was treated as an employee welfare benefit within that exclusion, and prior decisions were followed to hold that allowing credit would defeat the amended rule. Denial of credit was therefore upheld and the impugned order sustained.

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Issues: Whether CENVAT credit was admissible on service tax paid on insurance premium under the Nagrik Suraksha Policy for the relevant period after the amendment to Rule 2(l) of the CENVAT Credit Rules, 2004.

Analysis: The period in dispute fell after 1 April 2011, when the definition of input service was amended to specifically exclude life insurance and health insurance services when used primarily for the personal use or consumption of employees. The policy was treated as an employee-related insurance benefit and not as a service falling within the permitted scope of input service. The reasoning in prior decisions was followed to hold that allowing credit in such circumstances would defeat the express exclusion introduced by the amendment.

Conclusion: CENVAT credit was not admissible and the denial of credit was upheld.

Final Conclusion: The appeals failed on the sole substantive issue relating to eligibility of credit on the insurance service, and the impugned order confirming denial of credit was sustained.

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