2023 (6) TMI 583 - AT - Central Excise

Tribunal grants CENVAT Credit for Service Tax on insurance and consultancy services

M/s Bhaurao Chavan SSK Ltd. Versus Commissioner of Central Excise & Customs, Aurangabad

M/s Bhaurao Chavan SSK Ltd. Versus Commissioner of Central Excise & Customs, Aurangabad - TMI Issues Involved:The issues involved in the judgment are the admissibility of CENVAT Credit on Service Tax paid on insurance of vehicles, consultancy services for cogeneration plant, insurance for plant and machinery, and subscription fee paid to National Sugar Federation.Insurance of Vehicles:The Appellant, a manufacturer of sugar and molasses, availed CENVAT Credit on Service Tax paid on insurance of vehicles used in the manufacturing unit. The Revenue contended that such credit was not admissible. The Appellant argued that vehicles are integral to the manufacturing activity, making the Service Tax paid on vehicle insurance admissible as CENVAT Credit. The Tribunal agreed with the Appellant's submission and allowed the credit.Consultancy Services for Cogeneration Plant:The Appellant engaged a consultancy service for the installation of a cogeneration plant, for which Service Tax was paid. The Revenue claimed that since the plant was not installed during the disputed period, the Service Tax on consultancy services was not admissible as CENVAT Credit. However, the Tribunal held that even though the plant was not installed, the consultancy services were received during the relevant period, making the Service Tax paid on consultancy admissible for CENVAT Credit.Insurance for Plant and Machinery:The Appellant also availed CENVAT Credit on Service Tax paid on insurance for plant, machinery, equipment, and stock necessary for the manufacturing process. The Tribunal recognized that maintaining plant and machinery is essential for manufacturing and that insurance is a method to ensure their smooth functioning. Consequently, the Tribunal deemed the Service Tax paid on insurance of plant and machinery as admissible for CENVAT Credit.Subscription Fee to National Sugar Federation:The Appellant paid a subscription fee to the National Sugar Federation, equating it to a corporate membership fee for a club. The Appellant argued that similar corporate memberships have been allowed as input services in previous Tribunal decisions. The Tribunal accepted this argument and allowed the CENVAT Credit related to the subscription fee.Final Decision:After considering the arguments and records presented, the Tribunal accepted all submissions made by the Appellant's Counsel. Accordingly, the Tribunal allowed the CENVAT Credit of Rs.1,56,584 involved in the appeal by setting aside the impugned order. The appeal was allowed in favor of the Appellant.