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TMI Blog2009 (12) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... nd input services in terms of Cenvat Credit Rules, 2004. The Department issued a show cause notice dated 3-11-2006 seeking to deny Service tax credit amounting to Rs. 4,36,650/- and its recovery along with interest and also imposition of penalty on the appellant under Rule 15 of the Cenvat Credit Rules. The Assistant Commissioner vide order in original dated 23-2-07 allowed the cenvat credit of Rs. 3,98,142/- but disallowed the Cenvat credit of Rs. 38,510/- in respect of the services of "Marine Inland Transit Insurance" in connection with the procurement of plant and machinery of the captive power project, "money insurance for money in transit from the factory to bank to & fro", "insurance for personnel working in the appellant's factory in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or capital goods is specifically covered in the definition of input service, that when inward transportation of inputs is covered by the definition of input service, the transit insurance would also be covered, that the follow-up services are business auxiliary services availed in connection with installation of captive power plant which is very much covered by the definition of input services; that telephone services installed at the residence of general manager or in the guest house had been used in connection with business operation and hence are eligible for Cenvat credit and the insurance of money in transit is also an essential service relating to day to day business and hence the same has to be treated as input service, that in view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acture of dutiable final product and therefore, just because electricity generated does not attract any Central Excise Duty. Cenvat credit of Service tax on the transit insurance of plant and machinery cannot be denied, and that in this regard, he relies upon the Board's Circular No. 665/56/2002-CX, dated 25th September, 2002 wherein it has been clarified that cenvat credit in respect of capital goods used in manufacture of intermediate goods exempt from payment of duty which are used captively in the manufacture of finished goods chargeable to duty cannot be denied. 4. Shri M.K. Rastogi, learned Departmental Representative, pleaded that the services for being eligible for Cenvat credits must be used in the factory in relation to manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be covered. In view of this, I hold that the appellant is eligible for Cenvat credit of Service tax on the insurance premium for the transit of the machinery from the supplier's premises to the appellant's premises. 5.1 As regards the Revenue's plea that the power plant had not been used for manufacture of dutiable finished goods but had been used in the generation of electricity which is not excisable, this is not a valid ground for denial of Cenvat credit as the power plant is meant for generation of electricity which, in turn had been used in or in relation to the manufacture of dutiable finished products. 6. As regards the Cenvat credit of Service tax on the premium for insurance policy for money in transit, which is for insurance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the company's guest house has, therefore, been rightly denied. 9. As regards the Cenvat credit of Service tax on the premium for insurance of the personnel working in the appellant factory, the learned Departmental Representative pleads that this insurance is for drivers, security man employed through contractors and they are not the employees of the appellant's factory and hence, the Cenvat credit of Service tax in respect of accident insurance for them would not be available. The appellant's plea is that as per the provisions of Factory Act, the appellant as principal employer has vicarious liability for any compensation in the case of injury etc. to even contract workers and for this reason, the accident insurance covered is provided ev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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