2018 (11) TMI 419 - AT - Central Excise

CENVAT credit - input services - Rule 2(l) of CCR 2004 - insurance taken in the name of Joint Managing Director - Insurance premiums of motor vehicles and repair of motor vehicles - duty paying documents - not valid documents - Rule 9(2) of the CCR 2004. Insurance in the name of Joint Managing Director - Held that - Merely insurance premium is not in the name of the Joint Managing Director of the appellant company cannot be the reason to deny the Cenvat credit - insurance has been taken by the appellant for their use and the premium has been paid by the appellant only - credit allowed. Insurance premiums of motor vehicles and repair of motor vehicles - Held that - As these motor vehicles have been used by the appellant for their manufacturing activity and without these vehicles, the appellant is not able to manufacture their goods, therefore, in terms of Rule 2(l) of the Cenvat Credit Rules, 2004 the appellant is entitle to avail the Cenvat credit - credit allowed. Documents against which Cenvat credit has been taken are not valid documents in Rule 9(2) of the Cenvat Credit Rules, 2004 - Held that - The documents against which the appellant has taken the Cenvat credit are the challans and having all the details required for availment of Cenvat credit in terms of Rule 9(2) of the Cenvat Credit Rules, 2004 - Credit allowed. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Admissibility of Cenvat credit on insurance in the name of Joint Managing Director
2. Admissibility of Cenvat credit on insurance premiums of motor vehicles and repair services
3. Validity of documents for availing Cenvat credit

Analysis:

(a) Insurance in the name of Joint Managing Director:
The issue revolved around the admissibility of Cenvat credit on insurance taken in the name of the Joint Managing Director. The judgment clarified that even though the insurance was under the Joint Managing Director's name, it was for compensating losses to the company. Since the company paid the premium and the insurance was for their benefit, the Cenvat credit was deemed allowable. The judgment emphasized that the mere fact that the insurance was in the Joint Managing Director's name did not justify denying the credit.

(b) Insurance premiums of motor vehicles and repair of motor vehicles:
Regarding the insurance premiums for motor vehicles and repair services, the judgment highlighted that these services were essential for the manufacturing activities of the appellant. As per Rule 2(l) of the Cenvat Credit Rules, 2004, these services were considered input services necessary for the manufacturing process. Therefore, the appellant was entitled to avail the Cenvat credit on these expenses.

(c) Validity of documents for availing Cenvat credit:
The issue of the validity of documents for claiming Cenvat credit was addressed in the judgment. It was found that the documents presented by the appellant for availing the credit, such as challans, contained all the necessary details required under Rule 9(2) of the Cenvat Credit Rules, 2004. Consequently, the judgment concluded that the appellant had correctly availed the Cenvat credit based on valid documentation.

In conclusion, the judgment allowed the Cenvat credit availed by the appellant, as it was determined that the impugned order denying the credit was not sustainable. Therefore, the order was set aside, and the appeal was allowed with any consequential relief deemed necessary.