The Mumbai bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) granted relief to the Tata AIG by quashing the denial of service tax credit of approximately 7 crores on the grounds of CENVAT credit eligibility.
Tata AIG General Insurance Co. Ltd, the appellant assessee was engaged in the business of providing general insurance services and it had been receiving infrastructure facilities and support services from various motor car dealers as well as availing input credits against payment of tax paid towards availing of such services along with other services like work stations, advertisement, etc.
The assessee appealed against the order passed by the adjudicating authority for denial of CENVAT Credit at the receiver’s end on the grounds of incorrect description of services in the invoices raised by the service provider.
Vinay Jain, the counsel for the assessee contended that the assessee rightly availed the CENVAT credit and was not liable for the demand raised by the revenue.
Anand Kumar, the counsel for the department contended that the amount transferred to the vehicle dealers was dependent on the number of vehicles sold and insured and not based on the provision for supply of infrastructure or business support services.
The Bench observed that without opening an assessment of the provision of service extended by the service provider, CENVAT Credits cannot be denied to the recipient who had paid the required Service Tax through the service receiver to avail of the input services.
The two-member bench comprising Suvena Kumar (Judicial) and Anil G Shakkarwar (Technical) quashed the denial of service tax credit while allowing the appeal filed by the assessee.
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