CENVAT credit on motor vehicle insurance premiums for business use upheld where tribunal precedent supports allowance.

Whether CENVAT credit on insurance premiums for motor vehicles used in business but not directly in manufacture was contested; the tribunal reasoning applied binding on point precedent and parity of facts to conclude such credit is admissible. Because earlier tribunal decisions squarely allowed insurance-related input credit where vehicles served business purposes, the denial of credit could not be sustained on identical facts; the impugned refusal was set aside and the appeal allowed, resulting in allowance of CENVAT credit for the insurance premiums presented.

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Issues: Whether CENVAT credit on insurance premium paid for motor vehicles used in the business (but not directly in the manufacture of goods) is admissible where tribunal/bench precedent has held such credit cannot be disallowed under similar facts.

Analysis: The appeal concerns denial of CENVAT credit on motor vehicle insurance premium on the ground that vehicles were not used for manufacture of goods. The issue was examined against later tribunal decisions on identical facts where credit on insurance for motor vehicles used for business purposes was held allowable. The earlier cited tribunal decision directly addresses the same question and has been applied to set aside denials of credit in comparable circumstances. Having regard to the binding effect of the on-point tribunal precedent and the parity of facts, the denial of credit cannot be sustained.

Conclusion: CENVAT credit on insurance premium for motor vehicles used for business is allowable under the facts presented; the impugned order denying such credit is set aside and the appeal is allowed (decision in favour of the assessee).

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