2009 (6) TMI 96 - AT - Service Tax

Revenue appeal dismissed; Cenvat credit upheld for phones, rent-a-cab, insurance, courier, travel and maintenance after document verification

CESTAT, New Delhi dismissed the Revenue appeal and upheld the Commissioner (Appeals) in allowing Cenvat credit to the assessee on multiple input services. ... Admissibility of credit on input services - Mobile/Landline Phones - HELD THAT:- No material available that phones were not used in relation to the business activities. There is no specific provision in Cenvat Credit Rules that mobile phone would be used exclusively in relation to the manufacturing process in business activities. So, the Commissioner (Appeals) rightly allowed the credit on Mobile and Landline phones. Rent-a-Cab Service - Learned Jt. CDR submits that Rent-a-Cab service were not utilized by the manufacturer exclusively for the business purpose. - The Tribunal in the case of CCE, Nasik v. Cable Corporation of India Ltd. [2008 (6) TMI 4 - CESTAT, MUMBAI] held that input credit on Rent-a Cab is eligible. It is seen that the Commissioner (Appeals) after verification of the documents allowed the credit on Rent-a-Cab service. There is no material available that Rent-a-Cab was utilized otherwise. So, contention of the learned Jt. CDR cannot be accepted. Insurance premium - The ld. Jt. CDR submits that insurance premium paid to cover individual persons/staffs of the respondents and not plant and machinery. - Tribunal in the case of Stanzen Toyotetsu India Pvt. Ltd. [2008 (12) TMI 118 - CESTAT BANGALORE], held that input service credit is eligible on Group Insurance Health policy for employees/workers of the assessee. Therefore, the Commissioner (Appeals) rightly allowed the credit on Insurance premium. Courier (Inward Freight) - Learned Jt. CDR submits that courier service was not used for manufacture or in relation to the manufacture of final product. The Tribunal in the case of CCE Hyderabad v. Deloitte Tax Services India Pvt. Ltd., [2008 (3) TMI 35 - CESTAT, BANGALORE] held that courier service for inward freight is eligible for input credit - extended the benefit of input service credit on courier as it related to business activity. So, the Commissioner (Appeals) is justified in allowing credit on this service. C&F Services - The ld. Jt. CDR submits that C&F services were used in relation to export goods at the port of export and it is beyond the place of removal. - The Tribunal in the case of Rawnin Mining and Indus. Ltd. [2008 (10) TMI 79 - CESTAT, AHMEDABAD] held that Cenvat credit on service tax on C&F charges are eligible, in view of the fact that place of removal in the case of FOB export has to be treated as port of export and, therefore, credit was allowed. Thus, the Commissioner (Appeals) rightly allowed the credit on C&F service. Air Travel, Pager, Maintenance and Repair - The original authority denied the credit on the ground that the documents are not in favour of the respondents. I find that the Commissioner (Appeals) after verifying the documents allowed the credit partly. Therefore, there is no reason to deny the credit on the said item partly. I do not find any reason to interfere with the order of the Commissioner (Appeals). Accordingly, appeal filed by the Revenue is rejected. Issues:1. Admissibility of credit on mobile/landline phones.2. Admissibility of credit on rent-a-cab service.3. Admissibility of credit on insurance premium.4. Admissibility of credit on courier (inward freight) service.5. Admissibility of credit on C&F services.6. Admissibility of credit on air travel, pager, maintenance, and repair services.Admissibility of Credit on Mobile/Landline Phones:The original authority disallowed credit on the basis of unfavorable documents, but the Commissioner (Appeals) found the documents valid, showing the address of the respondents. The Commissioner observed that the phones were used in business activities, and the absence of a specific rule requiring exclusive use for manufacturing supported allowing the credit. Citing a Gujarat High Court case, it was established that credit cannot be denied when phones are installed in the factory premises. The Tribunal upheld the Commissioner's decision, allowing credit on mobile and landline phones.Admissibility of Credit on Rent-a-Cab Service:Initially denied, the credit on rent-a-cab service was allowed by the Commissioner (Appeals) after verifying that the taxis were used by employees for business activities. The Tribunal precedent supported eligibility for input credit on rent-a-cab services. Despite arguments against exclusive business use, the Commissioner's decision to allow the credit was upheld due to lack of evidence to the contrary.Admissibility of Credit on Insurance Premium:Initially disallowed, the Commissioner (Appeals) deemed service tax on certain insurance premiums eligible for credit, citing specific coverage types like fire, machinery breakdown, and group policies. The Tribunal precedent supported credit eligibility for group insurance health policies, aligning with the Commissioner's decision. Despite objections regarding coverage of individual persons/staff, the credit on insurance premium was upheld.Admissibility of Credit on Courier (Inward Freight) Service:The original denial of credit on courier (inward freight) service was overturned by the Commissioner (Appeals) after confirming registration details and usage for business activities. The Tribunal precedent established eligibility for input credit on courier services related to business activities, supporting the Commissioner's decision to allow the credit.Admissibility of Credit on C&F Services:Initially contested, the credit on C&F services was allowed by the Commissioner (Appeals) for export-related charges at the port of export, supported by photocopies of service provider registration certificates. Citing a Tribunal decision, the credit on C&F agent services was deemed eligible, considering the port of export as the place of removal. The Commissioner's decision to allow the credit on C&F services was upheld.Admissibility of Credit on Air Travel, Pager, Maintenance, and Repair Services:Initially partially denied, the credit on these services was allowed partly by the Commissioner (Appeals) after document verification. The decision was supported as there was no reason to completely deny the credit based on the verified documents. The Tribunal upheld the Commissioner's decision, leading to the rejection of the Revenue's appeal.