2011 (11) TMI 311 - AT - Service Tax

CESTAT Upholds Commissioner's Decision on Cenvat Credit for Insurance

The Appellate Tribunal CESTAT, New Delhi, rejected the Revenue's appeal regarding the availment of Cenvat Credit for Service Tax paid on insurance of ... Cenvat Credit of Service Tax paid on insurance of workman of factory – Held that:- The adjudicating authority, by relying upon the Tribunal's decision in the case of Millipore India Ltd. vs. CCE Bangalore (2008 - TMI - 32592 - CESTAT, Bangalore) has held that inasmuch as the medical and personal accident policy insurance etc. form part of the cost of the final product, in terms of CAS 4, the same has to be held as modvatable input services. No justifiable reason is there to interfere with the said order. Accordingly, the Revenue's appeal is rejected. Issues:- Availment of Cenvat Credit of Service Tax paid on insurance of workman of factory.Analysis:The judgment by the Appellate Tribunal CESTAT, New Delhi, addressed the issue of availment of Cenvat Credit of Service Tax paid on insurance of workman of a factory. The Tribunal noted that the adjudicating authority had relied on previous decisions to hold that insurance expenses such as medical and personal accident policy form part of the cost of the final product and qualify as modvatable input services under CAS 4. The Revenue, while filing the appeal, did not dispute the applicability of the said decisions but argued that the decisions were not accepted by the Revenue and an appeal was filed before a higher appellate forum. However, it was acknowledged that there was no stay of operation of the Tribunal's order. The Tribunal, after considering the arguments, found no justifiable reason to interfere with the order of the Commissioner (Appeals) and consequently rejected the Revenue's appeal. The judgment was pronounced in the open court by Ms. Archana Wadhwa, J.This judgment highlights the importance of consistency in applying legal principles and decisions. It underscores the significance of established precedents in determining the eligibility of expenses for Cenvat Credit. The Tribunal's decision emphasizes the need for parties to adhere to existing legal interpretations unless overturned by a higher authority. The case also demonstrates the procedural aspect of appealing decisions and the impact of the absence of a stay order on the enforcement of tribunal rulings. Overall, the judgment provides clarity on the treatment of insurance expenses in relation to Cenvat Credit and sets a precedent for future cases involving similar issues.