2019 (10) TMI 691 - AT - Service Tax

CENVAT Credit - input services - Errors and Omissions Policy and Transit Insurance - HELD THAT - The issue decided in the case of M/S. SIFY TECHNOLOGIES LTD. VERSUS COMMISSIONER OF GST CENTRAL EXCISE CHENNAI SOUTH 2019 (3) TMI 345 - CESTAT CHENNAI where it was held that this insurance policy is taken to cover the risk of fixed assets and is eligible for credit. Hence the disallowance is unjustified - appeal allowed - decided in favor of appellant.

Summary

Issues: Denial of CENVAT Credit for Errors and Omissions Policy and Transit Insurance

Errors and Omissions Policy:
The appellant argued that the denial of CENVAT Credit for Errors and Omissions Policy had been previously decided by the Tribunal in the appellant's own cases for different periods. The Bench observed that Errors and Omissions Policy covers risks related to financial loss caused by failure to perform, shortage in service, or products sold. The Tribunal had previously allowed credit for such policies in the appellant's case. Consequently, the disallowance of credit for Errors and Omissions Policy was deemed unjustified and set aside.

Transit Insurance Policy:
Regarding the Transit Insurance Policy, the appellant explained that it covers the risk of damage to goods during transportation to the customer's premises. The Revenue argued that since the place of removal was the appellant's premises, the credit was not eligible. However, as the appellant was an output service provider, the definition of input service was not limited to manufacturers. Therefore, any input service used for providing output service was eligible for credit. The disallowance of credit for the Transit Insurance Policy was considered unjustified and set aside.

Comparison of Arguments:
The Advocate for the appellant relied on previous Tribunal decisions to support the case, while the Authorized Representative for the Revenue failed to provide any contrary decisions to challenge the findings in the appellant's case. Consequently, the impugned order denying CENVAT Credit was set aside, and the appeal was allowed with consequential benefits as per law.