2018 (7) TMI 611

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....bramaniam, AC (AR) for the Respondent   ORDER Brief facts are that the appellants are manufacturers of Railway Brake Blocks, Disc Pads and Clutch Facings. They were availing the facility of CENVAT credit on inputs, capital goods and input services. Show cause notice was issued proposing to disallow the credit on various input services and after due process of law, the original author....

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.... because of defects in the finished products manufactured and cleared by the appellant and thus it has a direct nexus with the manufacturing activity carried out by them. Thus the denial of credit on product liability insurance is incorrect. She relied upon the decision in the case of Granules India Ltd. Vs. Commissioner of Central Excise, Hyderabad - 2017 (5) TMI 1079 - CESTAT Hyderabad. With reg....

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....therefore the insurance policy taken for product liability cannot be held to be an input service. With regard to the director sitting fee, he submitted that this has no nexus to the manufacturing activity. 4. Heard both sides. 5. The first issue that arises for consideration is whether the appellant is eligible for credit of the service tax paid on product liability insurance. The department....

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....policies addresses the financial risks of the manufacturer. Further, in the case of Granules India Ltd. (supra), the Tribunal has held that the credit availed on directors' liability insurance is eligible. I find that the disallowance of credit on this input service is unjustified and requires to be set aside, which I hereby do. 6. The second issue for consideration is regarding the eligibility....