2013 (4) TMI 359 - AT - Central Excise

Admissibility of Cenvat credit - service tax paid with respect to the after sales, repairs and maintenance service provided by the service provider during the warranty period. Held that - In the judgment of CCE Vadodara Vs. Danke products 2009 (7) TMI 137 CESTAT Ahmedabad it was held that repair and maintenance of transformers during warranty period is an activity related to the sale of goods and cenvat credit was accordingly held to be admissible. In the present appeal also the input services are obtained by appellant within the warranty period and cenvat credit is rightly admissible to the appellant.

Summary

Issues:
Admissibility of cenvat credit for service tax paid on after sales, repairs, and maintenance services provided during the warranty period.

Analysis:
The appellant filed an appeal against the order confirming a demand and penalty imposed by the adjudicating authority for a specific amount. The issue revolved around the admissibility of cenvat credit for service tax paid on repair and maintenance services obtained during the warranty period. The appellant cited a relevant judgment, CCE Vadodara Vs. Danke products, to support their claim that such input service credit is admissible to them.

The argument presented by the Ld. A.R. was that since the repair and maintenance services were utilized after the goods were removed from the factory, they did not fall within the definition of input services as per Rule 2(l) of the Cenvat Credit Rules, 2004. However, after considering both sides of the argument, it was noted that the issue of admissibility of input service credit had been settled. The judgment in the case of CCE Vadodara Vs. Danke products was particularly relevant in this context.

The judgment in the mentioned case established that activities like repair and maintenance of transformers during the warranty period are related to the sale of goods and therefore fall under the definition of input services. Consequently, cenvat credit for service tax paid on such services was deemed admissible. Applying the same reasoning to the current appeal, where input services were obtained within the warranty period, the cenvat credit was rightfully considered admissible to the appellant.

In conclusion, based on the detailed analysis and the precedent set by the previous judgment, the appeal filed by the appellant was allowed.