2016 (12) TMI 981 - AT - Central Excise

Whether the appellant being manufacturer is entitled for cenvat credit in respect of service tax paid on bill of Mobile Phone which is in the name of the employee as well as company, insurance premium of motor vehicle owned by company insurance premium of accident policy of the employees and insurance premium of guest house? Held that - I find that being a manufacturer, the appellant has availed cenvat credit in respect of service tax on the mobile phones and insurance policies. All these services in my considered view is related to the factory and over all manufacturing activity therefore admissible for the cenvat credit. This Tribunal in various decision has allowed the cenvat credit on these very input services - reliance placed on the decision of the case of TELENET SYSTEMS PVT. LTD. Versus COMMISSIONER OF C. EX., BELAPUR 2009 (7) TMI 259 - CESTAT, MUMBAI . The cenvat credit on mobile phones and insurance policies are admissible to appellant, the impugned order is set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether the manufacturer is entitled to cenvat credit for service tax paid on mobile phone bills, insurance premium of company-owned motor vehicle, accident policy of employees, and guest house.

Analysis:
The appellant, a manufacturer, sought cenvat credit for service tax paid on various expenses related to manufacturing activities. The appellant's representative argued that even though the mobile phone bills were in the name of employees, the company name was also mentioned, and the company settled the bills, justifying the credit. Additionally, the insurance premiums for the motor vehicle, accident policy for employees, and guest house were integral to the manufacturing process, falling under the definition of input service.

The Revenue, represented by the Assistant Commissioner, upheld the denial of credit as per the impugned order.

Upon review, the Tribunal acknowledged that the services in question were indeed linked to the factory and manufacturing operations, making them eligible for cenvat credit. Citing various precedents such as Telenet Systems Pvt. Ltd. and Reliance Industries Ltd., the Tribunal concluded that the appellant should be granted the cenvat credit for mobile phones and insurance policies. Consequently, the impugned order was set aside, and the appeal was allowed.

This decision emphasizes the nexus between the services availed and the manufacturing activities, ensuring that legitimate cenvat credit is not denied to manufacturers for essential input services.