2011 (6) TMI 427 - AT - Central Excise

Denial of credit on service tax on insurance of vehicle - Held that - Insurance of vehicle is in relation to maintenance related to activities of vehicles and therefore the credit has to be allowed. See CC & CE, Raipur vs. H.E.G.Ltd (2010 (10) TMI 357 (Tri)), CCE vs. J. K. Cement Works (2009 (1) TMI 146 (Tri))

Summary

Issues:
- Admissibility of credit on insurance of vehicle under service tax laws.

Analysis:
The judgment by the Appellate Tribunal CESTAT, DELHI dealt with two appeals concerning the admissibility of credit on insurance of a vehicle under service tax laws. The appellant contested the denial of credit on insurance of the vehicle, leading to demands of Rs.7,635/- and Rs.10,125/- in the respective cases. Additionally, a penalty of Rs.2,000/- was imposed in each case. The appellant argued that the issue was settled by previous Tribunal decisions, specifically referencing the case of CC & CE, Raipur vs. H.E.G.Ltd. where it was held that vehicle insurance is related to maintenance activities and thus credit should be allowed. This decision was based on precedents like CCE vs. J. K. Cement Works, establishing the admissibility of such credits during the relevant period.

The Respondent, represented by the SDR, reiterated the Commissioner's findings and reasoning, providing comments on the grounds of appeal. The Tribunal, after considering the arguments and precedents cited, found that the issue of admissibility of credit on vehicle insurance had been settled by previous Tribunal decisions, including those in the cases of J. K. Cement Works and H.E.G.Ltd. Consequently, the impugned orders denying the credit were set aside, and the appeals were allowed with consequential relief as per the law. The judgment pronounced in the open court concluded the matter in favor of the appellant, highlighting the importance of consistent application of legal principles in determining the admissibility of credits under service tax laws.