2020 (4) TMI 340 - AT - Central Excise

CENVAT Credit - input services - insurance services - air travels services - professional fee/consultancy services. Insurance services - rejected on the ground that such insurance also covers the families of the job workers, which is not permissible - HELD THAT - Appellant submits that they were admittedly entitled to the credit of service tax paid on insurance cover of their own factories and they are in a position to segregate such amounts. In view of the statement made by the Advocate, it is deemed fit to remand the said issue to the Original Adjudicating Authority - matter on remand. Air travels Services - denial on the ground that the appellant has not established any nexus between the travels undertaken by the said individuals with the business of the appellant - HELD THAT - It was held in the case of M/s. The Ramco Cements Ltd. 2018 (10) TMI 896 - CESTAT CHENNAI that the air travels undertaken by the employees for the business of the assessee are cenvatable input services. As such, the only fact requires to be investigated that such air travels were not in the individual capacity but were in connection with the business of the assessee. For verification of the said fact, the appellant s case needs to be remanded - Matter on remand. Professional fee/consultancy Services - HELD THAT - There is an observation by the Appellate Authority that such travels were undertaken by the person on a recreational trip and Forex charges, etc. Further, the appellant has not explained as to how these services can be allowed as input services and has failed to substantiate before the lower authorities for the credits, so availed by them - this issue is required to be remanded for verification of the documents, etc. - Matter on remand. Appeal allowed by way of remand.

Summary

Issues:
1. Rejection of cenvat credit on insurance services covering job workers' families.
2. Denial of credit on air travels without establishing nexus with business.
3. Disallowance of credit on professional fee/consultancy services.

Analysis:
1. The first issue pertains to the rejection of cenvat credit amounting to &8377; 98,772 on insurance services covering job workers' families. The tribunal noted that the appellant, engaged in manufacturing ball bearings, failed to segregate the service tax attributable to their own factories. The lower authorities denied the credit citing coverage of job workers' families and multiple locations. The appellant's counsel asserted the entitlement to credit for their factories and ability to segregate amounts. Consequently, the tribunal remanded the issue to the Original Adjudicating Authority for further examination.

2. The second issue concerns the denial of credits for air travels by the appellant's employees due to the absence of a proven nexus with the business. Referring to a precedent, the tribunal clarified that air travels for business purposes are cenvatable input services. However, verification is necessary to confirm that the travels were business-related. Therefore, the tribunal decided to remand the appellant's case for proper investigation into the nature of the air travels undertaken.

3. The final issue revolves around the disallowance of credit on professional fee/consultancy services. The Appellate Authority observed that certain travels were recreational in nature, and the appellant failed to substantiate the eligibility of these services as input services. As a result, the tribunal deemed it necessary to remand this issue for further verification of documents and substantiation before the lower authorities.

In conclusion, the tribunal set aside the impugned order and remanded the matter to the Original Adjudicating Authority for a fresh decision based on the observations made regarding the issues raised in the appeal.