Cenvat credit denied on insurance and CHA services, but penalties were waived for bona fide belief.

Cenvat credit on insurance premium for vehicles used in dispatch and movement of goods was held inadmissible for the period after 01.04.2011 because the amended input service definition excluded such claims, so denial of credit with interest was sustained. Cenvat credit on CHA services was also denied because the invoice was not in the appellant's name and no other evidence showed receipt of the service, so the demand with interest was upheld. Penalties were nevertheless set aside because prior credit allowed in the assessee's own case supported a bona fide belief, resulting in partial relief.

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Issues: (i) Whether Cenvat credit of service tax paid on insurance premium of vehicles used in relation to dispatch and movement of goods was admissible after the amendment to the definition of input service with effect from 01.04.2011; (ii) Whether Cenvat credit on CHA services was admissible when the invoice was not in the name of the appellant and there was no other evidence of receipt of the service; (iii) Whether the penalties imposed in both matters were sustainable.

Issue (i): Whether Cenvat credit of service tax paid on insurance premium of vehicles used in relation to dispatch and movement of goods was admissible after the amendment to the definition of input service with effect from 01.04.2011.

Analysis: The amended definition of input service was taken to exclude the type of insurance premium credit claimed for the period after 01.04.2011. The claim was therefore examined under the revised legal position, and the credit was found to be inadmissible. The lower authorities had correctly denied the credit and confirmed the demand with interest.

Conclusion: The denial of Cenvat credit and confirmation of demand with interest on the insurance premium issue was upheld, against the assessee.

Issue (ii): Whether Cenvat credit on CHA services was admissible when the invoice was not in the name of the appellant and there was no other evidence of receipt of the service.

Analysis: Credit was claimed on the basis of an invoice not issued in the appellant's name, and no independent material was produced to show that the services had in fact been received by the appellant. In the absence of supporting evidence, the claim failed on proof and entitlement.

Conclusion: The denial of Cenvat credit and confirmation of demand with interest on the CHA service issue was upheld, against the assessee.

Issue (iii): Whether the penalties imposed in both matters were sustainable.

Analysis: The assessee had previously obtained credit in its own case for an earlier period, and that circumstance supported a bona fide belief regarding eligibility. In those circumstances, the penal consequences were found unwarranted.

Conclusion: The penalties were set aside in favour of the assessee.

Final Conclusion: The demand and interest were sustained on both credit disputes, but the penalties were deleted, resulting in only partial relief to the assessee.

Ratio Decidendi: Cenvat credit is not admissible where the amended input-service definition excludes the claim or where the claimant fails to prove receipt of the service through proper documentation, and penalty may be waived where the assessee establishes a bona fide belief.

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