2026-VIL-1242-GUJ-CE
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CENTRAL EXCISE High Court Cases

Central Excise - Eligibility to CENVAT credit on General Insurance Service - Rule 2(l) of the CENVAT Credit Rules, 2004 - Respondent, a manufacturer of excisable goods, availed CENVAT credit of service tax paid on General Insurance Service for the period from January 2010 to January 2015 - Department alleged that after deletion of the words activities relating to business from the definition of input service with effect from 01.04.2011, General Insurance was not used directly or indirectly in relation to the manufacture of final products, and the Order-in-Original confirmed the demand with interest and penalty - The Tribunal set aside the Order-in-Original and the Appellant-Revenue filed an appeal under Section 35G of the Central Excise Act, 1944 - Whether the Respondent is eligible to avail CENVAT credit on General Insurance Service and whether any substantial question of law arises from the order of the Tribunal - HELD - A comparison of Rule 2(l) before and after the amendment shows that the only difference is the deletion of the words activities relating to business. The Department's own clarification records that the definition of input service was aligned with the definition of input so that services related to goods excluded from inputs are also excluded from input services, and that the expression activities relating to business was deleted while specific services were added to the list. The amendment was thus brought only with a view to harmonise the definition of input and input service. The services excluded by the amended definition do not include General Insurance Service of the kind availed by the Respondent. The clarification on activities relating to business concerned services such as sale of dutiable goods on commission basis and did not extend to the service availed by the Respondent. The Tribunal, following consistent decisions, held that General Insurance Service is directly or indirectly related to the manufacture of the final product and is admissible as input service, and no substantial question of law arises from that view - The Revenue appeal is dismissed
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