2016 (11) TMI 430 - AT - Central Excise

Tribunal Upholds Cenvat Credit Decision, Orders Limited Remand for Transit Insurance

Commissioner of Central Excise, Chennai-II Versus M/s. Carboline (India) Pvt. Ltd.

The Tribunal upheld the decision to allow Cenvat credit for Group Medical Insurance and Supply of Manpower Service. However, it ordered a limited remand ... Disallowance of Cenvat credit - Group Medical Insurance for employees - Held that: - there is no evidence to show that the same does not relate to the working group. This has relevancy to the manufacturing and the cost thereof is also considered in the cost of manufacturing - CENVAT credit allowed. Supply of Manpower Service - Held that: - there is no contrary finding of no use of such manpower in manufacture - CENVAT credit allowed. Transit Insurance - Outward Freight Service - Held that: - decision in the case of Commissioner of Central Excise, Chennai-II Vs M/s. Lucas TVS Ltd., & Ors. [2016 (4) TMI 189 - CESTAT CHENNAI] relied upon where it was held that It is evident from the invoices that the C&F agents are registered with the Service Tax authorities and have paid service tax on the services rendered by them as C&F agents to the appellants. The services include freight, delivery charges, transportation charges, airway bill charges, surcharges, handling charges (both loading and unloading). It is clear from the invoices, the C&F agents have rendered the said services to the appellant not only on transportation but other charges and paid service tax, credit allowed. - only a limited remand is made to the Adjudicating Authority to examine various aspects stated therein and appropriate order will be passed granting reasonable opportunity of hearing to the respondent. CENVAT credit allowed - matter remanded for Transit Insurance and Outward Freight Service - decided partly in favor of assessee. Issues:1. Disallowance of Cenvat credit for Group Medical Insurance2. Disallowance of Cenvat credit for Service Tax on Supply of Manpower Service3. Disallowance of Cenvat credit for Service Tax on Transit Insurance and Outward Freight ServiceAnalysis:1. Disallowance of Cenvat credit for Group Medical Insurance:The Tribunal found that there was no evidence to suggest that the Group Medical Insurance did not relate to the working group or that its cost was not considered in the manufacturing process. Consequently, the Tribunal upheld the decision of the learned Commissioner (Appeals) to allow Cenvat credit for the service tax paid on Group Medical Insurance.2. Disallowance of Cenvat credit for Service Tax on Supply of Manpower Service:The Tribunal noted that the learned Commissioner (Appeals) did not find any evidence indicating that the manpower services were not used in the manufacturing process. As a result, the Tribunal concluded that there was no basis to disturb the decision of the Commissioner to allow Cenvat credit for the service tax paid on Supply of Manpower Service.3. Disallowance of Cenvat credit for Service Tax on Transit Insurance and Outward Freight Service:The Tribunal referred to a previous case involving similar issues, where it was decided that a limited remand was necessary to the Adjudicating Authority to reexamine the aspects related to Transit Insurance and Outward Freight Service. Following the precedent set in the earlier case, the Tribunal remanded this specific issue back to the Adjudicating Authority for further examination and a fresh decision. The Tribunal confirmed part of the learned Commissioner (Appeals) order and dismissed the revenue appeal on that count, while remanding the issue related to Transit Insurance and Outward Freight Service for readjudication.In conclusion, the Tribunal upheld the decision to allow Cenvat credit for Group Medical Insurance and Supply of Manpower Service, while ordering a limited remand for further examination of the issue concerning Transit Insurance and Outward Freight Service.