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2019 (6) TMI 194

..... to thousands of crores are required to be safeguarded against various risks. Without such insurance services in case of any mis -happening, the enterprise would be at great loss and can never re-start its operations. We also find that the cost of such services stands included in the cost of production/ value of goods as certified by the Cost Accountant. There are no doubt that the services are integral part of cost of goods manufactured and would merit classification as “Input Service”. Unless and until a business is safeguarded against risk and losses it cannot work continuously. The Appellant are eligible to avail credit of service tax paid on Insurance Services as all are related to secure the plant and machinery and thus mer .....

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..... y xvi. Aviation Refuellers Liability Insurance Policy xvii. Public Liability Industrial Risk Policy xviii. Renewal of Cargo Legal Liability Policy xix. Loss of Hire Policy 1.1 They were issued show cause notice dt. 08.11.2017 proposing denial of credit of service tax on above policies on the ground that the said services were not required either directly or indirectly in or in relation to the manufacture of final product in as much as the lack of insurance cover does not have any bearing on the manufacturing process and therefore the services cannot be considered as Input Service as defined in Rule 2 (l) of the CCR, 2004. The demand was confirmed vide impugned order holding that the various insurance coverage preferred by the Appellant are .....

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..... cost of the production of the goods manufactured. He submits that the said services form part of cost of production/ value of the goods manufactured and thus qualifies as an Input Service. He relies upon the Hon ble Gujarat High Court Order in case of Essar Oil Ltd. 2016 (41) STR 389 (GUJ.) and M/s Willis Processing Services (India) Pvt. Ltd. 2017 - TIOL - 2072 - HC -MUM - ST. He also relies upon Tribunal Order in their own case as reported in 2018 (15) GSTL 366 (TRI) and submits that in the light of above judgments also the credit is available to the Appellant. 3. Shri Sameer Chitkara, Ld. Additional Commissioner (AR) appearing for the revenue supports the findings of the impugned order. 4. Heard both the sides and perused the records. We .....

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..... S.T.L 366 (TRI), the Tribunal, on being satisfied that the cost of service is included in cost of production, has allowed the credit. The relevant paras of the findings are as under : 9. This is 2nd round of litigation. The dispute is regarding the eligibility to avail Cenvat credit on the Service Tax paid by various service providers who are insurance Companies. The insurance policies are taken by the respondent-assessee in respect of plant and machinery, inputs, other goods and factory building and building & residential township. It is also undisputed that the cost of such insurance is included in the valuation of the final product manufactured by them. We find that in the 1st round of litigation when the matter came before this Benc .....

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..... aph that we had directed the adjudicating authority either to consider the Cost Accountant s certificates furnished by the assessee are to undertake special audit in terms of Central Excise Act, 1944. The adjudicating authority has exercised his option of accepting the Cost Accountant s certificates as furnished by the assessee and satisfied himself as to the fact that the value of the insurance cost has been included in the pricing of the final product. It is also recorded by the adjudicating authority that the order of the Tribunal is accepted by Revenue. On this factual matrix, we find that the findings as recorded by the adjudicating authority are in consonance of the law as has been settled by this Bench in the respondent-assessee s si .....

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