×
Headlines

Insurance Company eligible for Credit of Service Tax paid on Repairs and Maintenance of Insured Vehicles by Authorized Service Stations: CESTAT [Read Order]

insurance

The Chennai bench of the CESTAT, while allowing relief to M/s. United India Insurance Co. Ltd held that the Company is eligible for Cenvat Credit in respect of the service tax paid on repairs and maintenance of Vehicles by the Authorized Service Stations.

Earlier, the department took a view that the appellant- Company is not eligible for credit in respect of the tax paid on repairs and maintenance of the vehicles by the “Authorized Service Stations‟ (ASS), in respect of those vehicles which were insured by the appellant. According to the department, such services do not form input services for the appellant in terms of the definition of input services as per Rule 2 (i) of the CCR, 2004.

The department has also raised the issue that the invoices issued by the ASS which is the document based on which the appellant has availed the Cenvat credit, is invariably in favor of the owner of the vehicle and is not in favor of the appellant. Hence, Cenvat credit cannot be allowed to the appellants.

While disposing of the appeal in favor of the appellant-Company, the division bench held that the above service is eligible to be considered as an input service for the appellant.

“In the peculiar facts and circumstances of the case, we appreciate that the invoices will be issued by the ASS only in favor of the vehicle owners who took the vehicle to them for repair. But it is a fact that the insurance claims will be admitted by the appellant only after proper survey and further from the record it is seen that the credit availed by them is restricted to the portion of the repair bill reimbursed by the appellant. There is also nothing on record to suggest that the owner of the vehicle has also made claims for Cenvat credit. Consequently, we are of the view that not having the invoice in favor of the appellant should be considered only as a procedural infraction and should not be used to deny the credit which otherwise they are eligible,” the bench said.

To Read the full text of the Order CLICK HERE
CLOSE
CLOSE
Top