2026-VIL-976-CESTAT-DEL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - CENVAT Credit on Marine Cargo Insurance Services - Appellant provided detailed head-wise break-up of CENVAT credit availed on various insurance services including marine cargo insurance during the show cause reply - Commissioner considered the CENVAT credit pertaining to survey services instead of the actual amount claimed for marine cargo insurance services - Whether CENVAT credit can be denied on marine cargo insurance services when the assessee has submitted proper documentation and head-wise break-up showing that such services were directly connected with the manufacturing business – HELD - The CENVAT credit on marine cargo insurance services cannot be denied when the assessee has provided relevant documents and head-wise break-up demonstrating that the services are directly connected with the business and qualify as input services under the applicable credit rules. The Principal Commissioner's finding that the appellant neither offered explanation nor submitted documents stands incorrect as the documentary evidence was clearly presented in the show cause reply. The assessee becomes entitled to avail the full credit claimed for marine cargo insurance services as such services are directly used in or in relation to the manufacturing activity - The disallowance of CENVAT credit on marine cargo insurance services is set aside – The assessee appeal is allowed and the Revenue appeal is dismissedrnrnCENVAT Credit on Works Contract Services for Plant and Machinery - Principal Commissioner confirmed the demand for disallowance holding that works contract services are specifically excluded from the definition of input services under Rule 2(l) of CCR, 2004 - Whether CENVAT credit can be denied on works contract services when such services pertain to repair and maintenance of plant and machinery rather than construction of a building or civil structure – HELD -The works contract services for repair, maintenance, erection, painting and fabrication of plant and machinery cannot be construed as construction of a civil structure and therefore do not fall within the excluded category of input services. The exclusion clause in the applicable Rules specifically restricts the bar to works contract services used for construction of building or civil structure or a part thereof and laying of foundation or making structures for support of capital goods. Since the appellant's services relate to repair and maintenance of existing plant and machinery which are integral to the manufacturing activity, they qualify as input services. The strict interpretation of taxing statutes must be applied only to the specific language used in the rules, which clearly distinguishes between works contract for construction and those for plant and machinery maintenance - The denial of CENVAT credit on works contract services for plant and machinery repair and maintenance is set aside and the credit is allowed.rnrnCENVAT Credit on Manpower Supply Services for Plant Maintenance - Whether CENVAT credit on manpower supply services for repair and maintenance of plant and machinery can be denied when invoices demonstrate that such services were integral to the manufacturing operations – HELD - The CENVAT credit cannot be denied on manpower supply services for repair and maintenance of plant and machinery when documentary evidence from supplier invoices clearly establishes that the services were provided for such purpose during factory shutdown. Since the repair and maintenance activities undertaken are integral to the manufacturing activity of the assessee, they qualify as input services under the applicable credit rules. The characterization of such services as civil construction services is incorrect and unsustainable - The denial of CENVAT credit on manpower supply services is set aside and the credit is allowed - Further, the CENVAT credit cannot be denied on the ground of procedural lapses such as missing description in invoices when all substantive conditions prescribed under the credit Rules are fulfilled - The allowance of CENVAT credit on manpower supply services is upheld and the department's appeal challenging the same is dismissed.
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