2025-VIL-2153-CESTAT-AHM-ST
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SERVICE TAX CESTAT Cases

Service Tax - Cenvat credit on Insurance Policy - Appellant entered into an agreement with Reliance Infocomm Ltd (RIC) to provide Business Auxiliary Services, which included providing comprehensive surveillance and maintenance support services for RIC's telecom networks – Appellant had taken insurance policies to cover the risk of default in payment by telecom subscribers of RIC and mobile handsets given to such subscribers. These insurance policies were valid from May/June 2003 for a period of 3 years - Admissibility of Cenvat credit on the insurance services received prior to July 1, 2003, when the BAS became taxable - Whether Cenvat credit is admissible on insurance services received during the period when the output service (BAS) was out of the tax net – HELD - It is not forthcoming from the agreement as to who was the owner of Mobile hand sets and under what terms and conditions were these provided to the subscribers. The agreement between Appellant-RIL and RIC did not clearly indicate the ownership of the mobile handsets and the terms and conditions under which these were provided to the subscribers. The details regarding the relation of the insurance services to the output services provided by RIL and the consumption of these services on or after July 1, 2003 are not clear. These aspects need to be verified by the Adjudicating Authority to determine the allowability of the disputed Cenvat credit - The credit availer (appellant) is obliged to satisfy the jurisdictional authorities as to how the insurance services were related to the output services provided and were indeed consumed on or after July 1, 2003. The matter is remanded back for a limited purpose to verify these aspects and take a decision on the allowability of the disputed Cenvat credit - The appeal is disposed of by way of remand
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