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2016 (9) TMI 325 - CESTAT CHENNAI

2016 (9) TMI 325 - CESTAT CHENNAI - TMI - Cenvat credit - input services - used for insuring plant and machinery, building stock and other assets to cover up the risk of damage which may occur due to fire, burglary etc. - Held that:- I observe that the reliance placed by the Commissioner (Appeals) on the decision of the Apex Court in Maruti Suzuki case law and the Sundaram Brake linings case law is inapplicable since the decision in Maruti Suzuki is no longer a good law in view of the decision o .....

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lowing the decision of the Tribunal in the case of Sundaram Clayton Ltd. Vs CCE [2016 (6) TMI 161 - CESTAT CHENNAI], DCW Ltd. Vs CCE [2015 (5) TMI 973 - CESTAT CHENNAI] and CCE Vs India Cements [2011 (2) TMI 786 - CESTAT, CHENNAI], wherein it was held that insurance service protects raw materials and finished goods in transit as well assets of the company, for which credit cannot be denied for availing this service, the appellants are entitled to cenvat credit on the insurance services used for .....

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as not utilized, there is no reason to levy interest on the unutilized credit. Similarly, there is no evidence on record that appellant had intent to avail ineligible credit, Therefore, no penalty is imposable. The amount of ₹ 10,442/- is confirmed and the interest and penalty are set aside. - Decided in favour of appellant - Appeal No. E/41536/2015 - FINAL ORDER No.41459/2016 - Dated:- 1-9-2016 - Shri P.K. Choudhary, Judicial Member Shri Sai Prashanth, Advocate For the Appellant Shri A. C .....

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2/- . The period of dispute involved in this appeal is from April 2008 to January 2012. 2. Ld. Counsel submits that they are not contesting the second issue i.e. credit availed on employee insurance services which they have already reversed. However, he submits that interest is not leviable and no penalty is payable for the inadvertent availment of credit of ₹ 10,442/- on employee insurance service. He submits that interest is not payable inasmuch as such credit which was inadvertently ava .....

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uch as there is no malafide intention on their part; that Cenvat credit on employee insurance services were eligible prior to 1.4.2011 and its eligibility afterwards remained a question of interpretation of CCR 2004. Therefore, when there is no intention to avail ineligible credit and the availed credit having not been utiliszed, is of no loss to the department, no penalty is imposable. 2.1 As far as the first issue, Ld. Counsel submitted that insurance service is used for insuring plant and mac .....

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against. Ld. Counsel submits that it is settled law that department cannot take a contrary stand in a subsequent proceeding on similar set of facts when the issue stands settled for the previous period. He also filed copies of the insurance documents which shows the Risk Covered and Add on Covers. 2.2 He submits that the lower adjudicating authority and the appellate authority denied the cenvat credit on the ground that the insurance service cannot be said to be used either directly or indirect .....

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he submissions and settled case law cited as above besides pleading for setting aside interest and penalty. 3. Ld. A.R reiterated the order of the Commissioner (Appeals). 4. Heard both sides and perused the records including the case law cited by ld. Counsel. I find that since the appellants have admitted the liability on Employee Insurance Service involving an amount of ₹ 10,442, the same is upheld. However, since there is no dispute that they had sufficient brought forward balance in the .....

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ision Bench vide para 5 (c) of its order has held that insurance service protects raw materials and finished goods in transit as well assets of the company, for which credit cannot be denied for availing this service. In the case of CCE Tirunelveli Vs India Cements (supra), the Bench has observed as under :- 6.3 A close reading of the above definition clearly indicate that the term input services clearly include services relating to setting up, modernization, renovation or repairs of a factory. .....

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the financial security of the business. So also the same view is taken by the Tribunal in the case of CCE Vs India Cements (supra). I also find that department has accepted the order-in-original dt. 21.12.2012 passed by the adjudicating authority on similar set of facts in appellant s own case and a contrary view cannot be taken in the subsequent proceedings by the Revenue. 6. I also find that the learned appellate authority had disallowed the aforementioned credits on the grounds that the said .....

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