2019 (7) TMI 681 - AT - Central Excise

CENVAT Credit - input services - General Insurance Services - Works Contracts Services - Motor Car Services/General Services - periods from March, 2015 to December, 2015 and January, 2016 to September, 2016. Transit insurance - HELD THAT - A close reading of the definition of input service would clearly reveal that only General Insurance on goods concerning motor vehicles are excluded from the purview of availment of CENVAT credit that to if the said vehicle is not capital goods and the inclusive definition contained in CENVAT Credit Rules, 2004 has not confined the services mentioned therein up to the place of removal except services availed for storage - the tax paid on transit insurance for export of goods is an admissible credit - credit allowed. Works Contract Services - Repairs, renovation and modernisation of factory or its premises - denied on the ground that the works were in the nature of civil job or part thereof on works contract basis - HELD THAT - The invoices are mostly issued by the interior designers and the sample invoice of M/s Jindani Associates, referred by the Commissioner (Appeals), indicates the nature of work was hacking of floor or walls, cement slurry-cod as well as polymer basis water-proofing of floor and wall. It can very well be said that those are of the nature of repair and renovation and cannot be equated with just construction of civil structure - In the case laws reported in M/S ION EXCHANGE I LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, SUARAT-II 2017 (12) TMI 151 - CESTAT AHMEDABAD , and M/S. KNOAH SOLUTIONS PVT. LTD. VERSUS CC, CE ST, HYDERABAD 2016 (6) TMI 679 - CESTAT HYDERABAD it was consistently held by the Tribunal that such modernization, renovation and repair of factory premises are admissible input services. Therefore, the appellant is entitled to take and utilise those credits and the findings of the Commissioner (Appeals) is also erroneous in this respect - credit allowed. Motor car service - HELD THAT - A cursory reading of sub-clause (BA) clearly indicates that such credit is admissible if the same motor vehicle is a capital goods. Appellant not only asserts the same to be capital goods of the appellant s company during hearing of the case but also Order-in-Original at page 19 indicates that appellant had taken the same view before the adjudicating authority that the vehicle was owned by the company and was used for the business activities of the company and this fact remained undisputed all throughout the proceedings - This being the facts on record denial of CENVAT credit to the appellant on such general services (motor vehicle) on the ground that the same is covered in the exclusion clause is erroneous - credit allowed. Appeal allowed - decided in favor of appellant.

Summary

Issues: Denial of CENVAT credits on General Insurance Services, Works Contracts Services, and Motor Car Services/General Services.

General Insurance Services:
The appellant challenged the denial of CENVAT credits on Marine Insurance charges for goods in transit during import/export, citing Tribunal precedents and a Board circular supporting admissibility. The Commissioner (Appeals) denied credits on insurance beyond the place of removal. The Tribunal held that transit insurance for export goods is admissible, following precedent and the inclusive definition of 'input service.' The denial of credits on insurance for the factory's guest house was overturned as not being beyond the place of removal.

Works Contracts Services:
The denial of CENVAT credits on repairs, renovation, and modernization of the factory was contested. The Commissioner (Appeals) rejected the credits, deeming the works as civil job or part of works contract excluded from 'input service' definition. However, the Tribunal found the works to be repair and renovation, not solely construction, citing invoices and case laws supporting admissibility of such services.

Motor Car Services/General Services:
The denial of CENVAT credits on motor car services was disputed, with the Commissioner (Appeals) invoking an exclusion clause. The appellant asserted the motor vehicle as a capital good, supported by evidence. The Tribunal agreed that the vehicle was a capital good, thus the denial of credits was deemed erroneous.

The Tribunal allowed the appeals, setting aside the Commissioner's order denying CENVAT credits. The judgment highlighted the admissibility of transit insurance for export goods, repair and renovation services, and motor car services when the vehicle is a capital good. The decision was based on legal interpretations, precedents, and the specific circumstances of the case.