The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) observed that service tax paid on general insurance service is admissible as cenvat credit.
The issue involved in the present case is that whether the appellant is entitled for cenvat credit on the general insurance service related to building, plant and machinery, equipment, computers, workmen compensation, group accident policy, transit insurance etc.
Prakash Shah, counsel with Mohit Raval who appeared on behalf of the appellant submitted that the issue is no longer res integra as in various cases the cenvat credit of service tax paid on the general insurance service is admissible as cenvat credit
The counsel submitted that the demand of cenvat credit was raised invoking the extended period i.e. beyond normal period of one year. Since there is no fraud, collusion, suppression of fact or contraventions of any of the provisions with intention to evade duty, the demand for extended period is not sustainable on the ground of limitation also. He submits that the availment of credit was clearly disclosed in the monthly ER -1 return. Thus, there is no suppression of fact in availment of credit.
A Two-Member Bench of Ramesh Nair, Judicial Member and Raju, Technical Member observed that “it can be seen that in many cases the identical issue has been considered and it has been consistently held that the service tax paid on the general insurance service is admissible as cenvat credit as the service is directly or indirectly related to manufacture of the final product in the appellant’s factory. Accordingly we are of the view that the issue is no longer res integra. Since we have decided the matter on merit, we do not incline to address the issue on limitation.”
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