2013 (12) TMI 323 - AT - Service Tax

Cenvat credit - Insurance premium towards insurance policy taken for workers compensation - Held that - on the basis of insurance policy which shows the amount of premium involved and Service Tax credit can be taken. It is also not correct to say that Cenvat credit is taken on the document not serially numbered since insurance policy always has a serial number - it is a purely a technical ground and would not justify denial of credit - Decided against Revenue.

Summary

Issues:
1. Validity of availing Cenvat credit based on insurance policy for workers' compensation.
2. Interpretation of Service Tax Rules, 1994 regarding eligible documents for Cenvat credit.

Issue 1: Validity of availing Cenvat credit based on insurance policy for workers' compensation:
The appeal concerns the admissibility of Cenvat credit on Service Tax paid for an insurance policy related to workers' compensation under the Workmen's Compensation Act. The Revenue challenged the claim, arguing that the insurance policy is not a valid document for availing Cenvat credit. However, the Commissioner's order noted that the insurance policy presented by the appellant displayed both the premium amount and the Service Tax paid. The Tribunal analyzed the issue, emphasizing that the relevant rule under the Service Tax Rules, 1994 allows for various documents to be considered for availing Cenvat credit, including invoices, bills, or any other document containing necessary information. The Tribunal highlighted that the insurance policy, despite not being explicitly mentioned, fulfilled the requirements as it displayed essential details. It further dismissed the argument that the lack of serial numbering on the document invalidated the credit claim, noting that insurance policies inherently have serial numbers. Ultimately, the Tribunal deemed the objection raised by the Revenue as a technicality and upheld the order allowing the Cenvat credit based on the insurance policy.

Issue 2: Interpretation of Service Tax Rules, 1994 regarding eligible documents for Cenvat credit:
The Tribunal delved into the interpretation of Rule 4A of the Service Tax Rules, 1994 to determine the eligibility of documents for availing Cenvat credit. It underscored the importance of documents containing requisite information as specified by the statute, rather than focusing solely on prescribed formats like invoices or bills. The Tribunal emphasized the need for documents to encompass all necessary details for credit consideration and highlighted provisions empowering officers to approve credits even in cases of deficiencies. By scrutinizing whether the document used for claiming credit fulfilled the essential requirements, the Tribunal rejected the Revenue's argument that the insurance policy was insufficient for Cenvat credit purposes. The Tribunal's analysis centered on the substance of the document and its compliance with statutory requirements, ultimately leading to the dismissal of the Revenue's appeal on technical grounds.

This judgment from the Appellate Tribunal CESTAT AHMEDABAD underscores the significance of substance over form in determining the validity of availing Cenvat credit based on documents like insurance policies and highlights the need for documents to contain essential details as mandated by relevant rules and provisions.