2016 (8) TMI 450 - AT - Service Tax

Cenvat credit - input services - shipping fees, technical testing and certification and cleaning services for Vessels and Barges - Held that - the Service Tax credit in respect of shipping fees and services availed in respect of vessels and barges is covered by the order of Tribunal in the appellant s own case vide order dated 11.3.2014 and 08.03.2013. Hence, credit of these services is available and is allowed. Cenvat credit - insurance services - Held that - the insurance is in respect of vehicles and other assets owned by the appellant. Therefore, by relying on the decision of Hon ble High Court of Delhi in the case of DSCL Sugar Vs. CCE, Lucknow 2012 (12) TMI 830 - CESTAT NEW DELHI , the credit of the insurance services is allowed. Cenvat credit - repair and maintenance of guest house - Held that - the guest house is located right next to the factory premises. It is not the case of the Revenue that these services are used for personal consumption of the employees. The fact that the guest house is located right next to the factory implies that it is used in relation to the manufacturing activity. Therefore, the credit of repair and maintenance services of the guest house is allowed. - Decided in favour of appellant

Summary

Issues: Credit availed on input services - shipping fees, insurance, technical testing and certification, cleaning services for Vessels and Barges, repair and maintenance of guest house.

Analysis:

1. Insurance Services:
- Counsel argued that various insurance policies were essential activities and thus, the Service Tax paid on them should be admissible.
- Cited a decision allowing Service Tax on insurance of transit of finished goods and vehicle insurance.
- Highlighted insurance for safety of raw material and finished goods as ordinary business activity.

2. Repair and Maintenance of Guest House:
- Counsel argued for credit based on a Tribunal decision allowing similar services for residential townships.
- AR contended that guest house services lacked nexus with manufacturing activities, citing a Tribunal decision.
- AR relied on another case where services for staff quarters outside factory premises were not allowed.

3. Legal Precedents:
- Counsel referenced cases where credit for maintenance of Barges and Tugs, port services, and shipping fees was allowed.
- AR cited cases where credit for repair and painting of staff quarters outside factory premises was denied.
- AR also referred to a case where services for a guest house were not considered eligible input services.

4. Judgment:
- Tribunal allowed credit for shipping fees and services for vessels and barges based on previous orders.
- Credit for insurance services was allowed following a High Court decision.
- Credit for repair and maintenance of the guest house was allowed as it was deemed related to manufacturing activity.

5. Conclusion:
- The appeals were allowed based on the arguments presented and the legal precedents cited.
- The decision was pronounced on 05.08.2016 by the Tribunal.