2013 (3) TMI 403 - AT - Central Excise

CENVAT Credit - input services - duty paying documents - Department denied the service tax credit to the appellant company on the four invoices issued, on the ground the out of these four invoices, three is not mention in the nature of service and other has been taken in respect of Service Tax on the insurance premium for insurance of the finished goods during the transportation from the factory to the customers premises which is not covered by the definition of input service. Appellant made application to Commissioner (Appeals), Commissioner (Appeals) confirmed the entire Cenvat credit demand along with interest and imposed penalty. Appellant file the application before Tribunal. Held that - appellants are entitled to availment of credit in respect of all of its invoices - there is no dispute about the admissibility of credit or availment of service. - The denial of credit on the technical objection, when it is otherwise available, should not be upheld. - Decided in favor of assessee.

Summary

Issues: Service Tax credit denial on invoices lacking service nature description, denial of credit on insurance premium for transportation.

Analysis:
1. The Appellant claimed Service Tax credit amounting to Rs. 1,37,690/- on four invoices. The Department denied this credit, stating that three invoices from Axis Bank, M/s. TMVT Pvt. Ltd., and M/s. ABB, Bangalore did not specify the nature of service provided. Additionally, a credit of Rs. 4800/- for Service Tax on insurance premium for goods transportation was also challenged as not falling under the definition of input service.

2. The Asstt. Commissioner confirmed the Cenvat credit demand along with interest and imposed penalties on the Appellant Company and an individual. On appeal, the Commissioner (Appeals) upheld the credit demand but set aside the penalty on the individual. The present appeal challenges this decision.

3. The Appellant's counsel argued that the invoices did mention the nature of services, and thus, the denial of credit was unjustified. The invoices from Axis Bank, M/s. TMVT Pvt. Ltd., and M/s. ABB, Bangalore clearly indicated the services provided. The counsel also cited a Karnataka High Court judgment to support the admissibility of the insurance premium credit.

4. The Tribunal examined the invoices and found that they did specify the nature of services provided by the mentioned entities. The Axis Bank invoice detailed the service fee for loan processing, while the other invoices indicated repair services. Since there was no dispute about the admissibility of credit or service availed, the technical objection to the invoices was deemed invalid, and the Tribunal ruled in favor of the Appellant.

5. Regarding the Rs. 4800/- credit for insurance premium on outward transportation, the Tribunal agreed with the Appellant's argument. Considering the insurance as part of the transportation process, the Tribunal held that it fell within the definition of input service credit, entitling the Appellant to claim it.

6. Consequently, the Tribunal set aside the impugned orders, allowed the appeal, and granted consequential relief to the Appellant, emphasizing the entitlement of the Appellant to avail the credit for both the disputed invoices and the insurance premium.