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TMI Blog2018 (11) TMI 814X X X X Extracts X X X X X X X X Extracts X X X X ..... regular business operation, the appellant is availing Cenvat Credit on various inputs, capital goods and input services. The appellant has availed "product recall liability insurance" for its goods manufactured at its facility for the period from 17.10.2014 to 18.10.2015 and have also availed "product liability insurance" for its goods manufactured at its facility for the period from 17.10.2014 to 16.10.2016. A show cause notice dated 06.08.2015 was issued on the basis of their ER-2 returns alleging wrong availment and utilization of service tax credit on services such as insurance on goods storage, marine/transit insurance, telecom services, rental charges of buildings not related to factory and not connected with removal of goods. The ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... covers the risk of any claim arising out of accidental death or bodily injury or disease to any third party, accidental damage to property due to any defect in the product manufactured. The "product recall liability insurance" covers the risk or loss arising out of any recall of the product from the market due to accidental omission or introduction or substitution of a component or substance during manufacturing process. The Ld. Advocate strongly argued that it is very much evident that the impugned insurance covers are for risks accrued in the process of manufacturing by the appellant which clearly shows the direct nexus with the manufacturing process and also that the benefit of such insurance is received right during the manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, the appellant/manufacturer will have to recall the product and thereby incur huge financial loss. The insurance is for covering financial loss of the appellant/manufacturer and it cannot be considered as a post manufacturing activity. The finance or raising of capital or adjustment of finances by way of taking insurance etc., falls within the inclusive part of the definition. This cannot be said to be opposed to manufacturing activity for the reason that said insurance policies addresses the financial risks of the manufacturer. It is not in dispute that the appellant's contention to use the insurance policies taken by them was in respect of their product and business activities. The lower authorities have summarily disposed of the conte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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