2016 (10) TMI 1176 - AT - Central Excise

Appeal partially allowed on service tax for insurance services in manufacturing. Upheld Cenvat credit claim, reversing disallowance for specific services.

M/s. Pioneer Jellice India Pvt. Ltd. Versus CCE & ST, Pondicherry

The appeal was partially allowed, focusing on the quantification of service tax paid on insurance services for manufacturing activities. The appellate ... CENVAT credit - input services - various input services - Held that: - it appears that all such insurance services are integrally connected to the manufacturing activity carried out by the appellant. That cannot be ignored to be essential input services to ensure manufacture. Therefore, disallowance on these services is reversed - appeal allowed. Issues:Quantification of service tax paid on various insurance services for manufacturing activities.Analysis:The dispute in the appeal revolves around the lack of quantification of service tax paid on insurance services related to different aspects such as building, plant machinery, stocks, export transit insurance, domestic transit insurance, burglary business policy, public liability Act policy, office equipment policy, overseas travel insurance, vehicle insurance policy, personal accident insurance policy, etc. The issue is that while the allowance of Cenvat credit on such amounts is not in dispute, the quantification of the service tax paid is a point of contention.Upon examination of the grounds of appeal, it is noted that there are no specific grounds challenging the correctness of the order of the ld. Commissioner (Appeals) regarding the direction for quantification. The appellant's grounds of appeal are considered narrative and argumentative, which is not permissible under the CESTAT Procedure Rules, 1982. As a result, the order of the appellate authority is upheld concerning the Cenvat credit claim for various insurance services, except for specific services like money transit policy insurance, windmill insurance, domestic transit insurance, overseas travel insurance, vehicle insurance, personal accident insurance, and workers' compensation policy.The appellate authority did not provide reasons for proposing to disallow credit on the mentioned services. To ensure the essence of justice and meet judicial review standards, the disallowance cannot be approved without proper justification. It is prima facie evident that the insurance services in question are integral to the manufacturing activities undertaken by the appellant and are essential input services to ensure manufacturing. Consequently, the disallowance of credit on these services is reversed.In conclusion, the appeal is partially allowed, specifically concerning the quantification of service tax paid on insurance services related to manufacturing activities. The decision emphasizes the essential nature of insurance services in the manufacturing process and the need for proper justification in disallowing credits.