TaxTMI 
TaxTMI 
2019 (7) TMI 150
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....cate for the Appellant For the Appellant Shri S. Govindarajan, AC (AR) for the Respondent For the Respondent The brief facts of the case are that appellants are engaged in manufacture of automobile wheels and their parts, accessories and are registered with the Central Excise department. During the course of audit, the department found that the appellant had availed credit of service tax pai....
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....oducts namely, wheels, parts and accessories to automobile manufacturers. These automobile manufacturers provide warranty to the vehicles. The appellant also extends warranty to the wheels manufactured and sold to the automobile manufacturers. In order to indemnify the risk arising out of defects in the products supplied by the appellant, appellant has availed the product liability insurance. It i....
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....by the appellant. Therefore, the product liability insurance cannot be considered as an input service for the appellant. Further, these services are availed as a post-manufacturing activity since the liability is sought to be covered for the vehicles that have been already sold to the customers. He relied upon para-5 of the SCN to argue that it is only in the nature of a compensation that is paid ....
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....manufacturer has to compensate / satisfy the claim of the customer which is thereafter reimbursed by the appellant. In such cases to cover the risk of such payment, appellant has to avail product liability insurance. Indeed, this insurance is directly connected with the manufacturing activity of the appellant and is also an input service used in relation to the manufacture of the finished products....