Judge overturns disallowance of input service credit on insurance policies

The judge held that the disallowance of input service credit on Errors & Omission Insurance Policy, Transit Insurance Policy, and Umbrella Fixed Asset Policy was unjustified. The impugned order was set aside, and the appeal was allowed with any consequential relief as per law.

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Issues: Disallowance of input service credit on insurance services.

Analysis:
1. Errors & Omission Insurance Policy:
The appellant availed input service credit on Errors & Omission Insurance Policy, a liability insurance covering financial loss due to errors or omissions in services or products. The appellant argued that this policy has a nexus with the output service, making it eligible for credit. The Tribunal, in a previous case, allowed credit for such policies. The judge found the disallowance unjustified and set it aside.

2. Transit Insurance Policy:
The appellant also availed input service credit on Transit Insurance Policy to cover goods' accidents or damages during transportation to customers' premises. The respondent contended that since the place of removal was the appellant's premises, the credit was not eligible. However, as an output service provider, the appellant was entitled to credit for any input service used in providing output service. The judge deemed the disallowance unjustified and set it aside.

3. Umbrella Fixed Asset Policy:
The appellant had an Umbrella Fixed Asset Policy to cover risks like fire, theft, and weather damages to fixed assets and goods installed at customers' premises. The appellant argued that this policy was essential for providing output services and thus eligible for credit. The judge noted that the earlier Commissioner (Appeals) had allowed credit for this policy in the appellant's case for a previous period. Consequently, the judge found the disallowance unjustified and set it aside.

In conclusion, the judge held that the disallowance of credit on the three insurance policies was unjustified. The impugned order was set aside, and the appeal was allowed with any consequential relief as per law.

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