2015 (12) TMI 1099 - AT - Central Excise

CENVAT Credit - whether the services of storage and warehousing and insurance services would qualify to be input services within the meaning of the definition input services given under Rule 2(l) of the Cenvat Credit Rules - Held that - Tribunal in appellant s own case in appeal Nos. E/125, 1384/11 and E/85723/13 for the different period, has categorically held that storage and warehousing charges as well as insurance premium are eligible as input services. This Tribunal while holding the storage and warehousing services as input services relied upon the Hon ble High Court of Andhra Pradesh in the case of CCE vs. Sai Sahmita Storages P. Ltd. reported in 2011 (2) TMI 400 - ANDHRA PRADESH HIGH COURT wherein the Hon ble High Court has held that storage and warehousing charges are eligible input services as defined in Rule 2(l) of the Cenvat Credit Rules, 2004. - Decided in favour of assessee.

Summary

Issues:
- Eligibility of storage and warehousing services and insurance services for cenvat credit under Rule 2(l) of the Cenvat Credit Rules.

Analysis:
The appeal before the Appellate Tribunal CESTAT Mumbai challenged the dismissal of the appellant's appeal by the Commissioner (Appeals) regarding the eligibility of storage and warehousing services and insurance services for cenvat credit. The appellant, engaged in manufacturing excisable goods, availed cenvat credit on raw materials and input services. The appellant sent manufactured products for job work to a job worker and repacked them into aerosol containers using LPG as propellant. The Revenue issued a show cause notice alleging inadmissible cenvat credit on storage, warehousing, and insurance services, claiming the place of removal as the factory gate. The Assistant Commissioner held the place of removal as the factory gate and disallowed cenvat credit on insurance services related to company vehicles. The appellant contended that the input services were eligible for cenvat credit, citing CBEC circular and relevant legal provisions.

The learned counsel for the appellant argued that the Commissioner (Appeals) misunderstood the issue and wrongly denied cenvat credit for storage, warehousing, and insurance services. The counsel highlighted the definition of input services, place of removal, and taxable services as per the Rules. Regarding insurance premium, it was clarified that it pertained to motor vehicle insurance and specific voyage policy for raw material import. The learned AR supported the Commissioner (Appeals)'s findings, leading to a dispute over the eligibility of the mentioned services for cenvat credit.

The Tribunal focused on whether storage, warehousing, and insurance services qualified as input services under Rule 2(l) of the Cenvat Credit Rules. Referring to previous judgments, the Tribunal noted that storage and warehousing charges, along with insurance premiums, were considered eligible input services. Citing a case from the Hon'ble High Court of Andhra Pradesh, it was established that storage and warehousing charges met the criteria of input services under the Rules. Consequently, the Tribunal allowed the appeal, setting aside the Commissioner (Appeals)'s order and granting consequential relief to the appellant. The judgment was pronounced on 13.11.2015.