2018 (2) TMI 902 - AT - Central Excise

CENVAT credit - marine insurance service - insurance for directors and supervisory officers arising in day-to-day functioning - Held that - it is only a clerical error as no reason has been recorded for disallowing the credit of insurance for directors and supervisory officers liability - credit allowed. Marine insurance policy - Held that - no argument has been extended in the grounds of appeal - In absence of any argument, the appeal cannot be allowed. Appeal allowed in part.

Summary

Issues:
1. Denial of cenvat credit on marine insurance service and insurance for directors and supervisory officers post 1.4.2012.

Analysis:

The appellant, M/s. Rhodia Specialty Chemicals India Ltd., filed an appeal challenging the denial of cenvat credit on marine insurance service and insurance for directors and supervisory officers after 1.4.2012. The counsel for the appellant argued that the Commissioner (Appeals) had held the credit for marine insurance service eligible in para 8.1 of the impugned order, citing the case of Surani Ceramics Vs. CCE, Rajkot. However, in para 10 of the same order, the credit was deemed inadmissible without providing any reasons for the denial, leading to an apparent contradiction. The appellant contended that they were entitled to the credit for marine insurance policy covering goods post-factory gate removal and raw materials pre-factory entry. The counsel highlighted that the reliance on a previous case involving tugs and barges was misplaced as the current scenario did not involve such elements. Several decisions were cited to support the appellant's stance.

The Assistant Commissioner (AR) relied on the impugned order during the proceedings. The Tribunal, after considering the submissions, noted the inconsistency in the impugned order where the credit for insurance for directors and supervisory officers liability was initially deemed admissible in para 8.1 but declared inadmissible in para 10 without any recorded reasons. The Tribunal identified this as a clerical error and allowed the credit for insurance for directors and supervisory officers liability. However, regarding the credit for marine insurance policy, the Tribunal observed that the grounds of appeal lacked substantive arguments, merely stating that the credit rejection was based on a misconception about the nexus between input services and final product manufacture. As no detailed argument was presented, the appeal concerning marine insurance policy was dismissed. The Tribunal partially allowed the appeal as per the findings.

In conclusion, the Tribunal addressed the issues of denial of cenvat credit on marine insurance service and insurance for directors and supervisory officers post 1.4.2012. The judgment clarified the admissibility of the credit for insurance for directors and supervisory officers liability, rectifying a clerical error in the impugned order. However, the appeal related to the credit for marine insurance policy was dismissed due to the lack of substantial arguments. The Tribunal's decision provided clarity on the eligibility of cenvat credit in the specified contexts, emphasizing the importance of presenting comprehensive arguments to support appeals in such matters.