2017 (1) TMI 151 - AT - Central Excise

100% EOU - Rejection of refund claim - Rule 5 of the CCR read with N/N. 5/2006 CE (NT) dated 14.03.2006 - product liability insurance - Held that - I am of the considered opinion that the product liability insurance is covered in the definition of input service as contained in Rule 2(l) of the Central Excise Rules, 2004 and therefore I allow the appeal of the appellant by setting aside the impugned order with consequential relief - refund allowed - appeal allowed - decided in favor of assessee.

Summary

Issues:
Refund claim rejection based on Cenvat Credit Rules and Notification No. 5/2006 CE (NT) dated 14.03.2006 for a 100% EOU manufacturing processed food. Disallowance of refund on Insurance Service by the adjudicating authority. Appeal against rejection of refund claim before the Commissioner (Appeals) and subsequent appeal before the Appellate Tribunal CESTAT BANGALORE.

The appellant, a 100% EOU manufacturing processed food, filed a refund claim for unutilized cenvat credit of service tax paid on certain services for the quarter ending March 2011. The adjudicating authority rejected a portion of the claim, leading to an appeal before the Commissioner (Appeals) and subsequently before the Appellate Tribunal. The appellant specifically contested the disallowance of refund on Insurance Service, arguing that the product liability insurance falls under the definition of 'input service' as per Rule 2(l) of the Central Excise Rules, 2004. The appellant emphasized that the insurance was related to covering risks for General Product liability/Contamination of Final Products, not just the Head Office as incorrectly observed by the adjudicating authority. The Appellate Tribunal, after hearing both parties and reviewing the submissions, concluded that the product liability insurance indeed qualifies as an 'input service' under the Cenvat Credit Rules. Consequently, the Tribunal allowed the appeal by setting aside the impugned order and providing consequential relief to the appellant. The judgment was pronounced in Open Court on 17/11/2016.

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