2016 (11) TMI 1167 - AT - Central Excise

CENVAT credit - input services - various Insurance services - Held that - I find that undisputedly the insurance policies have been taken by the Appellant in relation to stock of raw materials, semi-finished goods/finished goods, packing material, consumables as is evident from the policies enclosed as Annexure A to the present appeal memorandum. The said policies are availed by the Appellant has a definite nexus with business of manufacture of finished goods. I find the same view has been expressed by the Tribunal in the aforesaid two judgments cited by the learned Advocate for the Appellant. In the result, the impugned Order is devoid of merit - CENVAT credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of CENVAT Credit on insurance services for raw materials/finished goods.
2. Eligibility of CENVAT Credit on input services used outside factory premises.
3. Interpretation of nexus with manufacturing business for CENVAT Credit.

Analysis:

Issue 1: The appeal challenged the denial of CENVAT Credit on insurance services related to raw materials/finished goods. The Appellants claimed credit for insurance on various items during a specific period but were issued a demand notice for recovery. The Commissioner (Appeals) partly allowed the appeal, leading to the current appeal.

Issue 2: The Appellant argued that the eligibility for CENVAT Credit should not be limited to services within the factory premises but should also include those used outside if they are connected to the manufacturing business. The Appellant cited relevant Tribunal judgments supporting their position.

Issue 3: The Tribunal found that the insurance policies taken by the Appellant were indeed related to their business of manufacturing finished goods, as evidenced by the policies submitted. The Tribunal agreed with the Appellant's argument and the precedents cited, concluding that the denial of credit lacked merit. Consequently, the appeal was allowed, granting any consequential relief as per the law.

In conclusion, the judgment addressed the issues of denial of CENVAT Credit on insurance services, the eligibility of credit for services outside factory premises, and the requirement of a nexus with the manufacturing business for such credit. The Tribunal's decision favored the Appellant, allowing the appeal and providing relief based on the established nexus between the insurance services and the manufacturing activities.