2013 (9) TMI 356 - AT - Service Tax

Input Service credit availed based upon the insurance policy and not a document on which service tax liability has been indicated separately Held that - Credit on input service would be admissible even if the appellant does not satisfy the other limbs Services used in relation to activities relating to business are also shown as one of the categories eligible for Input Service Insurance premium expenses are clearly expenses which are directly or indirectly in relation to manufacture of their final dutiable products. The insurance cover has direct nexus with the final products manufactured by the appellant and the payment of service tax on such insurance is clearly eligible for cenvat credit as Input Service - The service tax paid on such input service is eligible for taking cenvat credit. Decided in favor of Assessee.

Summary

Issues:
- Eligibility of availing cenvat credit on service tax paid on an insurance policy covering worldwide movement except India.

Analysis:
1. The appeal challenges the order disputing cenvat credit availed on service tax paid on an insurance policy by the main appellant company. The Revenue objected to the credit on grounds that the insurance policy did not separately indicate service tax liability and covered worldwide movement except India for final products.

2. The adjudicating authority confirmed the reversal of cenvat credit, imposed penalties, and the first appellate authority upheld the decision. The Tribunal remanded the matter once, but the first appellate authority maintained the decision. The issue revolves around the eligibility of cenvat credit on the insurance policy.

3. The appellant's counsel cited a previous case where this bench allowed similar appeals regarding cenvat credit on insurance policies in the appellant's favor. The Additional Commissioner argued that the insurance policy covered post-manufacturing activities and was not related to the final products' manufacture.

4. The primary issue is whether the appellant can avail cenvat credit on service tax paid for an insurance policy covering global movement except India. The service provider, M/s. Tata AIG General Insurance Co. Ltd., discharged the service tax liability, and the appellant settled the amount.

5. Referring to a previous judgment in the appellant's case, the Tribunal highlighted the broad definition of "input service" and the nexus between insurance expenses and the final products' manufacture. The Tribunal found the case sustainable and allowed the appeal based on the previous decision favoring the appellant.

6. Considering the legal pronouncements and the previous judgment in the appellant's case, the Tribunal concluded that the impugned order was unsustainable. Therefore, the Tribunal set aside the order and allowed the appeals, ruling in favor of the appellant's eligibility to avail cenvat credit on the insurance policy.

This detailed analysis of the judgment highlights the legal arguments, previous precedents, and the final decision in favor of the appellant's eligibility to avail cenvat credit on the disputed insurance policy.