Bhavani Industries Vs C.C.E. & S.T. Rajkot (CESTAT Ahmedabad)
Bhavani Industries (Appellant) filed an appeal impugning Order No. OIA-RAJ-EXCUS-000-APP-023-2018-19 dated April 18, 2018 passed by Commissioner (Appeals) Commissioner of Central Excise, Customs and Service Tax, Rajkot (Respondent).
Issue: Eligibility of Central Value Added Tax Credit (CENVAT Credit) on Product Liability and Product Recall Insurance Policy.
The Appellant counsel relied on an erstwhile judgement [M/s. Bhavani Industries V/s. C.C.E. & S.T. Rajkot 2018 (10) TMI 626 CESTAT Ahmedabad] wherein the matter was adjudged in the favor of the Appellant.
The Respondent, as opposed to the contentions raised by the Appellant, reiterated the findings of the impugned order; wherein it was held that the expenses towards product recall policy expenses are not eligible for CENVAT credit.
After taking perusal of all the facts and evidences, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad held that the Product Recall Policy expenses is born for the purpose of security of the goods and for this reason the service falls under the definition of input services and is therefore, eligible for CENVAT Credit.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
Shri. Rahul Gajera, Learned counsel appearing on behalf of appellant submits that the issue involved is the Cenvat Credit in respect of Product Liability and Product recall insurance policy. He submits that this is a periodical case, in the earlier period this tribunal has already decided the matter in favor of the appellant in the case reported as M/s. Bhavani Industries V/s. C.C.E. & S.T. Rajkot 2018 (10) TMI 626 CESTAT AHMEDABAD.
02. Rajesh. P. Parekh, Learned Authorized Representative (AR) appearing for the revenue reiterates the finding of the impugned order.
03. I have carefully considered the submissions made by both the sides and perused the records. I find that the issue that whether the appellant is entitle for the Cenvat Credit in respect of product liability and product recall insurance policy has already been decided by this tribunal, in the case cited (Supra) wherein, the tribunal has passed the following order:-
This issued involved in the present case is that whether the appellant eligible is for Cenvat credit in respect of Service Tax paid on Insurance services of ”Product Liability & product Recall Insurance Policy”. The policies is in respect of goods manufacture and sold by appellant. The adjudicating authority denied the Cenvat Credit on the ground that the Insurance is for post removal activities, therefore, on such Insurance Policies credit is not admissible. The Ld. Commissioner (Appeals) upheld the disallowance of the credit ordered by the adjudicating authority, therefore the present appeal.
2. Shri. Rahul Gajera, Ld. Counsel appearing on behalf of the appellant submits that the Insurance for product recall is determined before supply of the goods, as this is one of the condition of the sale of the goods, therefore, it cannot be called as a post removal activity. He submits in the identical case of the other assessee M/s Orbit Bearing India Pvt.Ltd vide order No. Raj/EXCuS/000/APP/208/16/17 dated 28.03.2017 the authority allowed the credit in respect of Product Recall Insurance Policy. As per the submission of the Ld. Counsel, Revenue has accepted the order. He submits that the Ld. Commissioner (Appeals) has mentioned in the order that this order is not binding on him. He also placed reliance on the following judgment.
