2019 (2) TMI 2081 - AT - Service Tax

Levy of Service Tax - replacement of spare parts by the manufacturer in lieu of the same replaced by the appellant during free warranty service - HELD THAT - The matter is indeed covered not only by the ratio of the Apex Court in UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. 2018 (3) TMI 357 - SUPREME COURT but also by the decision of this Tribunal in the case of ABT LTD. VERSUS CCE, COIMBATORE, CHANDRA AUTOMOBILE INDIA PVT. LTD. AND SREE SARADHAMBAL AUTOMOBILES P. LTD. 2018 (5) TMI 716 - CESTAT CHENNAI where it was held that only with effect from May 14, 2015, by virtue of provisions of Section 67 itself, such reimbursable expenditure or cost would also form part of valuation of taxable services for charging service tax. The impugned orders to the contrary are then required to be set aside - appeal allowed.

Summary

Issues: Common issue of replacement of spare parts during free warranty service.

Analysis:

The judgment by the Appellate Tribunal CESTAT Chennai, delivered by Hon'ble Ms. Sulekha Beevi C.S. and Hon'ble Shri Madhu Mohan Damodhar, involved a common issue regarding the replacement of spare parts by the manufacturer in lieu of the same replaced by the appellant during free warranty service. The appellant's counsel relied on the Supreme Court's decision in Union of India Vs. Intercontinental Consultants and Technocrats Pvt. Ltd. and highlighted a previous decision by the Tribunal in the case of ABT Ltd. Vs. Commissioner of Central Excise, Coimbatore, where the issue was decided in favor of the appellants. On the other hand, the ld. AR supported the findings in the impugned order.

Upon hearing both sides, the Tribunal found that the appellant's counsel was correct in asserting that the issue was covered by both the Supreme Court's decision and the Tribunal's previous ruling. Therefore, the Tribunal ruled in favor of the appellant, setting aside the impugned orders and allowing the appeals with consequential relief, if any, as per law. The judgment was dictated and pronounced in open court by the Tribunal.