2015 (3) TMI 79 - AT - Central Excise

Waiver of pre deposit - Input service credit - product liability insurance service - Held that - Adjudicating authority has dropped the proceedings and allowed the input service credit on the product liability insurance. I find from the decision of the Tribunal in the case of Rotork Control (India) Pvt. Ltd. (2010 (6) TMI 336 - CESTAT, CHENNAI), dealt the identical issue of product liability insurance. - applicants have made out a prima facie case for full waiver of pre-deposit of duty along with interest and penalty. In view of the above, I waive pre-deposit of the entire amount of duty along with interest and penalty and stayed its recovery till the disposal of the appeal. - Stay granted.

Summary

Issues:
- Input service credit on product liability insurance service
- Monetary ground for dismissal of appeals
- Nexus of input service credit with manufacturing activity

Analysis:
The judgment involves four appeals arising from a common order passed by the Commissioner (Appeals). The adjudicating authority had allowed the input service credit on product liability insurance service and ceased further proceedings initiated under the show cause notice. However, the Revenue filed appeals against this decision, which were allowed by the Commissioner (Appeals), leading to the appellants approaching the Tribunal for redressal.

The advocate for the applicant reiterated the findings of the adjudicating authority, emphasizing that the input service credit was rightfully allowed, and the issue was discussed in detail. On the contrary, the appellate authority relied on a previous Tribunal decision related to transit insurance. The advocate argued that in a similar case, the Tribunal had allowed the appeal, citing the case of Rotork Control (India) Pvt. Ltd. Vs. CCE, Chennai 2010 (20) STR 684 (Tri.- Chen.).

The Revenue's representative contended that three of the appeals involved amounts below Two lakhs and should be dismissed on monetary grounds. On the merits, it was argued that the input service credit was availed for post-manufacturing activities and did not directly relate to the manufacture of final products. Several case laws were cited to support this argument, including Telco Construction Eqpt. Co.Ltd.Vs. CCE, Belgaum 2013 (32) STR 482 (Tri. Bang.) and Lear Automotive India Pvt. Ltd. CCE, Nashik 2012 (286) ELT 558 (Tri.- Mumbai).

After hearing both sides, the Tribunal found that the adjudicating authority had correctly allowed the input service credit on product liability insurance. The Tribunal referred to a previous decision involving a similar issue and reproduced relevant portions of the decision to support its conclusion. Consequently, the Tribunal ruled in favor of the applicants, waiving the pre-deposit of duty along with interest and penalty, and stayed the recovery of the amount until the appeal was disposed of. All stay applications were granted, and the order was pronounced and dictated in the open court.