2026-VIL-688-CESTAT-DEL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Availability of Cenvat credit on insurance services, professional/consultancy fees for hedging services, tour and travel expenses - Appellant claimed Cenvat credit on service tax paid for various services including insurance, professional/consultancy fees, and tour and travel expenses, which were denied by the department - Whether the appellant is eligible for the claimed Cenvat credit on these services – HELD - The Cenvat credit on insurance services taken towards insurance of safety/performance of capital goods is eligible, as the service tax paid for obtaining these insurance policies was used in the business of the appellant, even though the policies covered risks of the appellant's sister concern as well. The provisions of Cenvat Credit Rules allow credit on duty/tax "paid" and not "payable" - The appellant imports certain material for its business purposes and export final products, as a result appellant has to pay through foreign exchange/currency. There are frequent variations in the currency rates when compared to Indian currency. The said variation may lead to losses if the foreign exchange is not dealt properly. Therefore, to escape from these losses, the method of hedging is chosen. Thus the aforesaid activity is indirectly related to manufacturing business of appellant. Thus, the Cenvat credit on professional / consultancy fees for hedging services used to manage foreign exchange risks related to the appellant's business is eligible, as the services are indirectly related to the manufacturing business. Similarly, the Cenvat credit on tour and travel expenses incurred for training the appellant's employees to enhance their skills and productivity, which are indirectly related to the manufacture of final products, is also eligible – The impugned order is set aside and the appeal is allowed
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