Cenvat credit on insurance and clearing services sent back for verification of nexus, documents, and Rule 9 compliance.

Denial of Cenvat credit on service tax paid for insurance premium and clearing and forwarding services required fresh verification of supporting evidence and satisfaction of the prescribed conditions. The claimant remained responsible for proving that the input services were used in relation to manufacture and clearance of excisable goods. The Original Authority was directed to examine bank records, proof of service tax payment by the service provider, the nexus between the services and manufacturing activity, and compliance with Rule 9(5) of the Cenvat Credit Rules, 2004. Limitation and penalty were also kept open for consideration in the remand proceedings, and the matter was sent back for de novo decision.

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Issues: Whether the dispute relating to denial of Cenvat credit on service tax paid on insurance premium and clearing and forwarding services required fresh adjudication after verification of evidence and compliance with the prescribed conditions.

Analysis: The evidence regarding payment of insurance premium and the records relating to the clearing and forwarding service required verification at the original stage. The burden remained on the claimant to establish the use of the input service in relation to manufacture and clearance of excisable goods. The Original Authority was directed to examine the bank records, the treasury payment of service tax by the service provider, the nexus of the services with manufacture, and whether the conditions under Rule 9(5) of the Cenvat Credit Rules, 2004 were satisfied. The question of limitation and penalty was also left for consideration in the remand proceedings.

Conclusion: The matter was remanded to the Original Authority for de novo consideration and a reasoned and speaking order after affording opportunity to the appellant.

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