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May 2014

2014 (33) S.T.R. 522 (Tri.-Del.) DCM Engineering Products vs. Commissioner. Of C. Ex. & S. T., Chandigarh-II

By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
Reading Time 1 mins
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Whether service tax paid for insurance of company’s vehicles used by senior officials of the company for official work and for commuting between residence and factory eligible CENVAT Credit? Held, yes.

Facts:
The appellant, a manufacturer of Iron Castings had a factory in a remote area. They provided vehicles to their senior officials to commute between residence and factory. The appellant availed CENVAT Credit of service tax paid on insurance of such vehicles. Taking a view that there is no nexus between such insurance services and manufacturing activity, the department denied CENVAT Credit on insurance services.

Held:
Tribunal observed that the vehicles were used for company’s work as well as for commutation of senior officials and it was not a welfare activity but was an activity related to business and therefore, CENVAT was held admissible.

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