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2017 (5) TMI 1079 - AT - Central ExciseCENVAT credit - input services - nexus with manufacturing activity - Property Insurance Services - Marine Policy - Directors & Officers liability - Product Liability Insurances - Held that - property insurance is in respect of the insurance of factory premises including plant & machinery and service tax paid - Marine Policy is in relation to the inward and outward movement of manufactured goods and the service tax paid by the insurance authorities is in respect of finished goods hence Cenvat Credit was eligible - Directors and Officers liability insurance is in respect of the insurance cover taken by the appellant assessee in respect of the liability that may arise on directors and officers during discharge of their duties towards appellant company - product liability is an insurance of the products for which services were provided by insurance company - all the services have nexus with business - credit allowed - appeal allowed - decided in favor of assessee.
Issues:
Denial of Cenvat Credit for service tax paid on various insurance services like Property Insurance, Marine Policy, Directors & Officers liability, and Product Liability Insurances. Analysis: The judgment pertains to two appeals against Order-in-Appeal No. Hyd-CE-004-APP-003-1-17 CE, dated 19.04.2016, involving the denial of Cenvat Credit for service tax paid on different insurance services. The issue revolves around the eligibility of the appellants to claim Cenvat Credit for the service tax paid on services such as Property Insurance, Marine Policy, Directors & Officers liability, and Product Liability Insurances during specific periods. The appellants argued that these services were related to their business activities and products, contrary to the department's objection. The lower authorities had ruled against the appellants, questioning the relevance of these services to the manufacturing of finished products. However, the presiding member, Mr. M.V. Ravindran, found that the lower authorities had erred in their understanding of the law. Upon review, Mr. M.V. Ravindran noted that the insurance services in question were indeed linked to the appellants' business activities and products. He referenced previous judicial decisions to support his findings. Notably, the judgment in the case of Federal Mogul Goetze (India) Limited, India Cements Ltd, JSW Salav (Steel) Ltd., and Hindustan Zinc Limited favored the appellants' eligibility to avail Cenvat Credit for the service tax paid on the mentioned insurance services. Additionally, the Tribunal's decisions in the cases of Neo Foods Pvt. Ltd. and Suzuki Motorcycle India Pvt. Ltd. supported the appellants' stance on claiming Cenvat Credit for Product Liability insurance. Mr. M.V. Ravindran concluded that the impugned orders were unsustainable based on authoritative judicial pronouncements and ruled in favor of the appellants by setting aside the contested portions of the appeals. In summary, the judgment by Mr. M.V. Ravindran of the Appellate Tribunal CESTAT HYDERABAD addressed the denial of Cenvat Credit for service tax paid on various insurance services. The decision highlighted the appellants' eligibility to claim Cenvat Credit for services like Property Insurance, Marine Policy, Directors & Officers liability, and Product Liability Insurances, emphasizing the connection of these services to the appellants' business activities and products. Supported by relevant judicial precedents, the judgment overturned the lower authorities' rulings and allowed the appeals in favor of the appellants.
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