2018 (10) TMI 896 - AT - Central Excise

CENVAT Credit - ineligible input services - Insurance Service on various machines viz. plant and machinery - Tour Operator services - Repair and Maintenance services - recovery u/r 14 of the CCR 2004 read with Section 73 (1) of the FA 1994 - Held that - Repair and maintenance services are integral part of the manufacturing concern for which denial of CENVAT credit of the service tax paid on such services is ruled out - credit allowed on repair maintenance services. Tour Operator services - Held that - So far as Air Travel Agency service and tour operator services are concerned, services of such agencies were used to book tickets and carry out the travel by the officers for marketing as well as business promotion - credit on Tour Operator services allowed. Insurance services - Held that - The Delhi Bench of the Tribunal has already decided this issue in the case of M/s. SRF Ltd. Vs. C.C.E., Indore 2016 (10) TMI 1235 - CESTAT NEW DELHI , where it was held that insurance paid on plant, machinery and equipment has to be held as input service - credit allowed - appeal allowed - decided in favor of appellant. Appeal allowed in toto.

Summary

Issues:
1. Disallowance of CENVAT Credit on input services.
2. Admissibility of CENVAT Credit for Insurance service, repairs and maintenance service, Renting of Immovable Property Service, Tour operator service, and Air Travel Agent service.
3. Appeal against the Order-in-Appeal disallowing credit and imposing penalty.
4. Consideration of previous decisions by the Tribunal on similar issues.

Analysis:

1. The appellant, a manufacturer of PPC Cement, faced a Show Cause Notice alleging the wrongful availing of CENVAT Credit on ineligible input services. The Order-in-Original disallowed credit, imposed penalties, and ordered recovery. The Commissioner of Central Excise (Appeals-II) allowed credit for Security Services but disallowed credit for other services, upholding penalties. The appellant appealed, leading to a remand by the forum to present additional evidence. Subsequently, the lower authority confirmed the disallowance, prompting the current appeal.

2. During the hearing, the appellant's consultant argued that previous Tribunal decisions supported the appellant's position on the contested services. Notably, repairs and maintenance were deemed integral to manufacturing, justifying CENVAT credit. Similarly, services like Air Travel Agency and tour operators were considered necessary for business promotion, warranting credit. Regarding Insurance Service on machinery, the Tribunal cited precedents where insurance on plant and equipment was held as an eligible input service, aligning with the appellant's claim.

3. The Tribunal, following established precedents and legal interpretations, found the disallowance of CENVAT Credit by the Revenue to be unjustified. Consequently, the disallowance was set aside, and the appeal was allowed in favor of the appellant.

4. The judgment referenced previous Tribunal decisions to support the appellant's arguments, emphasizing the consistency in rulings regarding the admissibility of CENVAT Credit for various services. By aligning with established legal interpretations and precedents, the Tribunal upheld the appellant's appeal, highlighting the importance of legal principles and precedents in resolving similar tax disputes effectively.