2018 (11) TMI 1138 - AT - Central Excise

Appeal success: CENVAT Credit granted for service tax on Global Product Liability Insurance

M/s. Sundaram Dynacast Pvt. Ltd. Versus Commissioner of G.S.T. & Central Excise, Chennai North Commissionerate

The forum allowed the appeal in favor of M/s. Sundaram Dynacast Pvt. Ltd. concerning the eligibility for CENVAT Credit on inputs and input services. The ... CENVAT Credit - input services - Global Product Liability Insurance - reverse charge mechanism - Held that:- The issue settled in appellant own case M/S. SUNDARAM DYNACAST P. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CHENNAI-II [2018 (2) TMI 2 - CESTAT CHENNAI], where it was held that Product Liability Insurance were held to be covered by the definition of 'Input Services', so as to make the same as cenvatable - appeal allowed - decided in favor of appellant. Issues:1. Eligibility for CENVAT Credit on inputs and input services.2. Rejection of credit for service tax paid under reverse charge mechanism for Global Product Liability Insurance.3. Appeal against Order-in-Original No. 10/2017 dated 20.06.2017.4. Precedent decisions on the eligibility of Product Liability Insurance as 'Input Services.'Eligibility for CENVAT Credit on inputs and input services:The case involved M/s. Sundaram Dynacast Pvt. Ltd., holders of Central Excise Registration for manufacturing automobile components, claiming CENVAT Credit. A Show Cause Notice was issued, leading to Order No. 08/2016, which was appealed. During the appeal, a Statement of Demand dated 24.01.2017 rejected the credit for service tax paid under reverse charge mechanism for Global Product Liability Insurance. Order-in-Original No. 10/2017 confirmed the demands. The appellant's appeal before the Commissioner of G.S.T. & Central Excise (Appeals-I), Chennai was unsuccessful, prompting the appeal before the forum.Rejection of credit for service tax paid under reverse charge mechanism for Global Product Liability Insurance:The issue of rejecting the credit for service tax paid under reverse charge mechanism for Global Product Liability Insurance was pivotal in this case. The Superintendent of Central Excise passed Order-in-Original No. 10/2017 confirming the demands based on the Statement of Demand dated 24.01.2017. The appellant's detailed reply was considered, but the demands were upheld, leading to the unsuccessful appeal before the Commissioner of G.S.T. & Central Excise (Appeals-I), Chennai.Appeal against Order-in-Original No. 10/2017 dated 20.06.2017:The appellant's appeal before the forum stemmed from the adverse decision in Order-in-Original No. 10/2017 dated 20.06.2017. Despite the detailed reply filed by the appellant, the demands were confirmed by the adjudicating authority, resulting in the appeal before the Commissioner of G.S.T. & Central Excise (Appeals-I), Chennai, and subsequently, the appeal before the forum.Precedent decisions on the eligibility of Product Liability Insurance as 'Input Services':During the hearing, the Advocate for the appellant referenced a previous case where the issue of Product Liability Insurance being covered under 'Input Services' was addressed. The Tribunal in the previous case ruled in favor of the appellant, allowing the appeals with consequential relief. Based on the precedent decisions and stare decisis, the current appeal was allowed with consequential reliefs, if any, following the same line of reasoning as the previous case.