M/s. Sify Technologies Ltd. Versus Commissioner of GST & Central Excise Chennai South
Service Tax
2018 (10) TMI 563 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 9-10-2018
ST/41189/2018 – 42550/2018
Service Tax
Ms. Sulekha Beevi C.S., Member (Judicial)
For the Appellant : Ms. Sridevi , Advocate
For the Respondent : Shri L. Nandakumar, AC (AR)
ORDER
Brief facts are that the appellants are engaged in providing various taxable services namely telecommunication service, online information and data processing retrieval services, internet café services, franchisee services, information technology software services etc. On verification of records, it was noticed that they had availed input service credit on insurance services for an amount of Rs. 7,73,832/- for the period from April 2014 to March 2015. It appeared to the department that general insurance / insurance auxiliary services are not covered within the definition of input service and therefore the
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nancial loss. Thus the insurance facility availed in terms of errors and omission insurance helps the appellant with regard to indemnify the financial loss which may occur due to the failure of the software products supplied by the appellant.
The said services have direct nexus with the output service provided and therefore are eligible for credit. She relied upon the decision in the case of M/s. Rane brake Lining Ltd. Vs. Commissioner of Central Excise – 2018 (7) TMI 611 and Granules India Ltd. Vs. Commissioner of Central Excise – 2017 (5) TMI 1079.
2. The other issue is with regard to the disallowance of credit on transit insurance policy to the tune of Rs. 3,57,232/-. She submitted that the said insurance services were availed for moving of goods for installation. The appellant provides telecommunication services and for such services the erection and commissioning services of various parts required for the output services are to be moved from their factory premises to the custome
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policy taken by the appellant for indemnifying the errors / omissions or defects in the software products supplied by them.
In the decision relied by the appellant, the Tribunal has allowed credit on product liability insurance. The very same analogy can be applied for the software products which are supplied by the appellant. Further on analyzing the definition of input services, it can be seen that only those type of insurance services which fall under the category of life insurance, health insurance etc. which are availed for personal consumption are excluded from the ambit of the definition. These policies which are for covering the product liability in case of defect to the products supplied would definitely come within the inclusive part of the definition.
The conclusion arrived by the authorities below that these are post-manufacturing activities cannot be agreed. Even on analysis of the definition, the inclusive part specifically mentions the services which can be availed up
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