TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Appellants win on insurance premium, asked to pre-deposit for irregular charges</h1> The judge found in favor of the appellants regarding the insurance premium on company vehicles but deemed the credit for travel charges, factory garden ... Demand - Rule 2(l) of the Cenvat Credit Rules, 2004 - Cenvat credit - It is submitted that the company employees who undertook travels had done so for business purpose connected with the factory activities and, therefore, service tax paid on the travel charges should be admissible to the appellants as input service tax credit - This very vehicles received service from authorized service station and credit of service tax paid on such service was allowed by the lower authorities. If that be the case, prima facie, there is no point in holding that the insurance service in respect of the company vehicles was not availed directly or indirectly in relation to the production/clearance of tyres - no invoice or other document is available on record to differentiate credit of Rs. 60,545/- from credit of Rs. 12,148 - Decided in favor of the assessee Issues: Determination of admissibility of Cenvat credit on service tax for various services availed by the appellants.Analysis:1. Demand of Duty and Penalty: The lower authorities demanded duty and imposed a penalty on the appellants for the period between December 2004 to May 2006, amounting to Rs. 1,36,137/- and an equal penalty. The demand was related to the appellants' final product (tyres) and the utilization of CENVAT credit of service tax on certain services considered as 'input services.'2. Admissibility of Input Services: The main issue in this case revolved around whether specific services availed by the appellants qualified as 'input services' under Rule 2(l) of the Cenvat Credit Rules, 2004. These services included insurance on company vehicles, tours and travels, factory garden maintenance, and plant housekeeping services. The lower authorities denied Cenvat credit on these services, stating they were not directly or indirectly used in the manufacturing or clearance of the final product.3. Arguments and Counter-Arguments: The appellants argued that the definition of 'input service' was broad enough to cover the services in question. They contended that the insurance premium on company vehicles, travel charges for business purposes, and maintenance services for the factory garden and plant housekeeping should qualify as input services. They also highlighted a discrepancy in the denial of credit without distinguishing between the two types of services.4. Decision and Rationale: After considering both sides, the judge found a prima facie case in favor of the appellants regarding the insurance premium on company vehicles. However, credit for travel charges, factory garden maintenance, and plant housekeeping services was deemed irregularly availed and utilized for duty payment on tyres. The appellants were instructed to pre-deposit the irregularly availed amount within four weeks. Compliance would lead to a waiver of pre-deposit and a stay of recovery for the penalty and the remaining duty amount.This detailed analysis of the judgment addresses the issues involved, the arguments presented, and the final decision rendered by the tribunal, providing a comprehensive understanding of the legal reasoning and outcome of the case.
TaxTMI 
TaxTMI 
