Term “Input services” clearly include services relating to setting up, modernization, renovation or repairs of a factory. It inter-alia includes services received in connection with security. Insuring plant and machinery to safeguard against interruption/destruction/break-down and to cover loss of profit due to stoppage of work due to perils like fire, riot, terrorist attack, damages etc. is necessarily a precautionary measure to safeguard against any unwarranted situation of the business. The security of a company does not merely depend upon the physical security and insurance against such perils definitely assures the financial security of the business.
In view of the above, the Commissioner (Appeals) holding that the insurance policy has been used to cover expenses relating to pay-roll when the production is stopped on account of damages of machinery or plant and, therefore, the insurance policy to cover loss of profit would come within the expression for ”activities relating to business” in the inclusive limp of the definition of input services appears legal and reasonable.
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
Appeal No. E/310/10 & E/CO/42/2010
Arising out of Order-in-Appeal No. 64/2010 Dated: 26.2.2010
Passed by the Commissioner of Central Excise (Appeals), Madurai
Date of Decision: 04.02.2011
COMMISSIONER OF CENTRAL EXCISE, TIRUNELVELI
Vs
M/s THE INDIA CEMENTS LTD.
Appellant Rep by: Shri A B Niranjan Babu, SDR
Respondent Rep by: Shri S Muttuvenkataraman, Adv.
