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TMI Blog2021 (8) TMI 1366X X X X Extracts X X X X X X X X Extracts X X X X ..... credit of duty/service tax paid on inputs/input services used for the manufacture of their final products. During the course of scrutiny of records by the audit officers of LTU [Audit Circle], Chennai, an objection was raised by the officers that the credit availed on the service tax paid on various insurance policies is not eligible. Show cause notice dated 11-8-2017 was issued proposing to disallow the credit of service tax paid on various insurance policies during the period from Aug., 2014 to Jun., 2016. Later, another statement of demand dated 26-12-2017 was also issued for an amount of Rs. 9,42,191/- for the period from Jul., 2016 to Jun., 2017 on the very same grounds. After due process of law, the original authority passed a common ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f removal, and includes services used in relation to modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage up to the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation up to the place of removal; but excludes, - (A) service portion in the execution of a works contract and construction services including service listed under clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services by way of sale of dutiable goods on commission basis.] 3. It is argued by him that though Clause (BA) imposes restriction in respect of credit on General Insurance services, it is not a blanket restriction. After the amendment, in the definition of "input services" with effect from 1-4-2011, the credit pertaining to service tax paid on premium for General Insurance of Motor Vehicles and Life Insurance are alone excluded. There is no exclusion in respect of service tax paid on the premium for General Insurance in the nature of Asset Insurance, Burglary Insurance, Product Contingent Liability Insurance, Transit Insurance etc., as these are necessary for activity of manufacturers. The General Insurance in the nature of Marine Po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of liabilities that may arise in the course of business. The Learned Counsel relied upon the decision in the case of M/s. Alstom T & D Ltd. v. Commissioner, LTU, Chennai reported in 2016 (41) S.T.R. 646 (Tri. - Chennai). The discussions made is rendered by this Tribunal in the appellant's own case in respect of other policies in the nature of Money Insurance, Public Liability Insurance, Product Liability Insurance etc., as reported in 2020 (2) TMI 1195 CESTAT CHENNAI was also relied by the Learned Counsel for the appellant. 5. The second issue is with regard to the credit denied in respect of service tax paid on Marine Insurance Policy. Copy of the policy was produced by the Learned Counsel and the relevant portion is as under :- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not raised in the show cause notice. In Para 3.1 of the impugned order, the Commissioner (Appeals) held that in the case of Export, these services are availed beyond the "place of removal" and, therefore, is not eligible for credit. That the Cenvat credit on such services availed in the course of export, which is beyond the "place of removal" can be claimed only as refund along with submission of proof of export of goods. The Learned Counsel submitted that the Marine Insurance Policy is for indemnifying loss of goods while in transit and also for covering the risk of the raw materials that are under transit. Such policy is essential for the appellant to conduct the business of manufacture and is directly connected to their manufacturing ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns, I hold that the credit availed on the service tax paid on Contingent Liability Insurance is eligible. 6.2 The second issue is with regard to the credit availed on Marine Insurance Policy. From the show cause notice, it is seen that the only ground alleged for denying the credit is that there is no nexus between the input services and the manufacturing activity. However, the Commissioner (Appeals) has taken on a different approach to conclude that since the Marine Insurance Policy is availed beyond the "place of removal", the same is not eligible for credit. That the appellant has to apply for refund of credit under Rule 5 of Cenvat Credit Rules. Needless to say that Marine Insurance Policy need not be consignment specific. The ref ..... X X X X Extracts X X X X X X X X Extracts X X X X
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