2015 (5) TMI 1083 - AT - Central Excise

CENVAT credit - warranty service - denial on the ground that the warranty service has been availed by the appellant after sale of equipments - Held that - The issue has been settled by this Tribunal in the case of CCE, Vadodara-II vs. Danke Products 2009 (7) TMI 137 - CESTAT, AHMEDABAD , wherein it has been held that repair and maintenance of transformers during warranty period is an activity of relating to sale of goods - the appellant is entitled for input service credit on repair charges paid to the dealers by the appellant as the same is an activity relating to sale of goods by the appellant - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Denial of input service credit on warranty service post-sale.

Analysis:
The appellant, a manufacturer of equipments, appealed against the denial of input service credit on warranty service availed post-sale. The impugned order contended that warranty service was provided after the sale of equipments, thus disallowing the credit. The appellant's dealers repaired equipments during the warranty period, charging repair fees. The Revenue argued against granting input service credit due to the post-sale nature of warranty service.

The Tribunal referred to a precedent, CCE, Vadodara-II vs. Danke Products, where it was established that repair and maintenance during the warranty period are activities related to the sale of goods. Citing this precedent, the Tribunal concluded that the repair charges paid to dealers by the appellant qualify for input service credit as they are connected to the sale of goods. Consequently, the impugned orders were deemed meritless, and the appeals were allowed with any consequential relief. Additionally, the application for an extension of stay was disposed of accordingly.