2015 (4) TMI 824 - AT - Service Tax

Denial of CENVAT Credit - Insurance service - services availed by the appellant from the factory premises to the door steps of the customers - Whether Cenvat Credit of insurance services availed by the appellant from the factory gate till delivery of the goods to the customers premises is admissible or not - Held that - Appellant is availing insurance services in relation to transport of raw-material plant & machinery and finished goods owned by the appellant. No separate charges on account of transportation of goods from the factory to the customers premises have been shown by the Revenue to be recovered from the customers. The fact that transit insurance of the finished goods is borne by the appellant clearly indicates that ownership of the finished goods lies with the appellant till there delivery to the customers premises. In the facts and circumstances of the present appeal the place of removal shits to the customers premises and Cenvat Credit of insurance services availed in relation to such delivery will be admissible to the appellant as held by this Bench in the case of Priya Industrial Packaging (P) Ltd. Vs. Commissioner of Central Excise Daman (2010 (6) TMI 213 - CESTAT AHMEDABAD). - Decied in favour of assessee.

Summary

Issues:
Admissibility of input service credit for insurance services from factory premises to customer doorsteps.

Analysis:
The appellant filed an appeal against the rejection of admissibility of input service credit for insurance services from factory premises to customer doorsteps. The appellant argued that ownership of goods remains with them, and no separate freight is charged to customers. They relied on CBEC Circular No. 97/8/27-ST and case laws to support their claim. The advocate highlighted that details of services were disclosed in ER-I returns, making the extended period inapplicable.

The Revenue contended that insurance charges incurred after the factory gate are not admissible for credit. The Revenue strongly defended the lower authorities' decision to reject the credit.

The Tribunal deliberated on whether Cenvat Credit for insurance services from factory gate to customer premises is admissible. It was noted that the appellant availed insurance services for transportation of goods they owned, with no separate transportation charges to customers. The Tribunal found that ownership of goods remained with the appellant until delivery to customer premises, making the place of removal shift to the customer premises. Cenvat Credit for insurance services in such cases was deemed admissible based on the CBEC Circular and precedent cases. The appeal was allowed on merits without discussing the limitation aspects of the demand.

In conclusion, the Tribunal allowed the appeal filed by the appellant on merits, emphasizing the admissibility of Cenvat Credit for insurance services related to the delivery of goods to customer premises.