Wrongly disallowance of credit of Club Membership Service and Insurance Service of the appellant.

The Customs, Excise & Service Tax Appellate Tribunal ruled in favour of M/s Rajratan Global Wire Ltd., allowing Cenvat credit for club membership and insurance services. Previously, these credits were disallowed, with authorities citing amendments to the Cenvat Credit Rules, 2004, which excluded such services from the definition of input services after July 1, 2012. The Tribunal's decision suggests these services are indeed eligible for Cenvat credit.

CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
NEW DELHI

PRINCIPAL BENCH, COURT NO. IV
EXCISE APPEAL NO. 50794 of 2019 (SM)

[Arising out of the Order-in-Appeal No. IND-EXCUS-000-APP-387-18-19 dated
28.02.2019/06.03.2019 passed by The Commissioner (Appeals – I), Central

Excise, Customs & Service Tax, Indore (M.P.).]

M/s Rajratan Global Wire Ltd. Appellant
200-B, Industrial Area, Sector – I,
Pithampur (M.P.)

VERSUS

Commissioner, Respondent
Central Goods & Service Tax,
Ujjain (M.P.).

Appearance

Shri Ankur Upadhyay, Advocate – for the appellant.

Shri P. Gupta, Authorized Representative (DR) – for the Respondent.

CORAM: HON’BLE MRS. RACHNA GUPTA, MEMBER (JUDICIAL)

FINAL ORDER NO. 51239/2021
DATE OF HEARING : 19/03/2021.
DATE OF DECISION: 09/04/2021.

RACHNA GUPTA :-

The appellant M/s Rajratan Global Wire Ltd. is engaged in manufacture of wire of non alloy steel viz. steel wire, stranded wire and Tyre Bead wire. They are also availing the facility of Cenvat credit under Cenvat Credit Rules, 2004 (hereinafter CCR) on the inputs, capital goods as well as on input services. During the scrutiny of the appellant’s record AGMP Audit party observed that the appellant has availed incorrect Cenvat credit of service tax on ineligible services like Customs House Agent Service, Rent a Cab Operator Service, Banking and Financial Services, Insurance Services, Courier Services, Travel Agent Services, Subscription of Club Membership etc. Availment of Cenvat credit on the services which was not found in order as these were not specified categories of input services. Resultantly vide show cause notice No. 216 dated 23 April 2018 credit of Rs. 27,98,462/- was proposed to be disallowed to the appellant for availment of the above-mentioned services for not being the input services. Interest on appropriate rate and proportionate penalty was also proposed. The said proposal was confirmed vide order-in-original No. 20/DC/DEMAND/ADJ/PITH-I/18-19 dated 25 October 2018. Commissioner (Appeals) vide the order No. INDEXCUS-000-APP-387-18-19 dated 28 February 2019 has modified the order by allowing Cenvat credit to the appellant with respect to all the above-mentioned services except for the two, that is, the credit on Membership of Club Service and credit on Health nsurance Service holding that both the services are specifically excluded from the definition of input service, as stands amended, w.e.f. 1 July 2012. Being aggrieved, the appellant is before this Tribunal.

2. I have heard Shri Ankur Upadhyay, learned Counsel for the appellant and Shri P. Gupta, learned Authorized Representative for the Department.

3. It is mentioned on behalf of the appellant that all the services which are used by the manufacturer directly or indirectly in relation to the manufacture of final product and for the clearance of final product up to the place of removal are input services for which credit is allowable. It is mentioned that the definition as stands amended w.e.f. 01 July 2012 also permits the same. In addition the amended definition has an inclusive part which has not specified services on which Cenvat credit is allowable but it still has specific activities in relation to which any service availed by its recipient would be eligible for availment of Cenvat credit.

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