LAWS(CE)-2013-2-84

J.K. CEMENT Vs. COMMISSIONER OF CENTRAL EXCISE

Decided On February 21, 2013
J.K. Cement Appellant
V/S
COMMISSIONER OF CENTRAL EXCISE Respondents

JUDGEMENT

(1.) THE appellant are manufacturers of cement.

(2.) They employ contract workers supplied by labour contractors. However, in terms of the statutory provisions of the Workmen's Compensation Act, 1923, it is the appellant as manufacturer who are required to obtain Group Accident Insurance Policy for the workers. Accordingly, the appellant have obtained Group Accident Insurance Policy for the workers for which they paid the premium and also the service tax on the same. The point of dispute is as to whether the appellant would be eligible for Cenvat credit of the service tax paid on the premium of the above insurance policy. The department being of the view that the appellant are not eligible for this Cenvat credit as the workers are contract workers and not the regular employees of the appellant and on this basis, the jurisdictional Asstt. Commissioner confirmed the Cenvat credit demand of Rs. 22,619/ - and imposed penalty of Rs. 2,000/ -. On appeal to the Commissioner (Appeals), this order of the Asstt. Commissioner was upheld by the order -in -appeal dated 27 -10 -2010, against which this appeal has been filed. Heard both sides.

(3.) SHRI Rakesh K. Mathur, ld. Departmental Representative defended the impugned order reiterating the findings of the Commissioner (Appeals) in it. I have considered the submissions from both sides and perused the records. I find that it is not disputed that it is the appellant who have obtained the accident insurance policy for the workers and paid the premium for the same and this is required to be done in terms of the provisions of the Workmen's Compensation Act, 1923. Since getting the workers, even if the contract workers, insured is the requirement of the law, insurance service has to be treated as an activity service in or in relation to the manufacture of the finished products and would be covered by definition of input service. I find that the same view has been taken by the Tribunal in the appellant's own case in Final Order No. A/1418/2012 -SM (BR), dated 13 -9 -2012. In view of this, the impugned order is not sustainable. The same is set aside. The appeal is allowed.