2017 (6) TMI 427 - AT - Service Tax

Repair and Maintenance service - export of service - whether Service Tax of ₹ 1,33,21,724/- is demandable rejecting the claim of the appellant that it is export of service as the service of Repair and Maintenance have been provided by the assessee located in India to the service receiver, which is located outside India? - extended period of limitation - Held that - similar issue decided in the case of M/s. Samsung India Electronics P. Ltd Versus CCE. Noida 2015 (1) TMI 1098 - CESTAT NEW DELHI , where it was held that assessee had provided services of business support and maintenance and repairs to their clients located outside India and performed in India on behalf of client located outside India. Therefore, it is the case of export of services. Accordingly, it was held that no Service Tax is leviable. CENVAT credit - whether the appellant have rightly taken CENVAT Credit for ₹ 1,49,11,944/- being the Service Tax charged by their Authorized Service Centres, which have provided service to the appellant under the warranty period on sale of their products during the period April, 2006 to June 2007? - Held that - service tax paid on expenses incurred for providing warranty services are entitled for input service credit - no extended period of limitation is invokable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether Service Tax is demandable for the appellant for providing repair and maintenance services to a service receiver located outside India, and if the extended period of limitation is applicable.
2. Whether the appellant can rightfully claim Cenvat Credit for the Service Tax charged by their Authorized Service Centres for services provided under warranty on products sold during a specific period.

Analysis:
1. The appeal addressed the issue of whether Service Tax amounting to ?1,33,21,724 is demandable from the appellant for providing repair and maintenance services to a service receiver located outside India. The Revenue contended that the services provided by the appellant did not qualify as export of service as they were performed in India for a client outside India. Additionally, the question of invoking the extended period of limitation was raised. The Tribunal referred to a previous decision where a similar issue was adjudicated, concluding that when services are provided in India on behalf of a client located outside India, it constitutes export of services, and thus, no Service Tax is leviable. Consequently, the Tribunal ruled in favor of the appellant on this issue.

2. The second issue revolved around the appellant's claim for Cenvat Credit amounting to ?1,49,11,944 for Service Tax charged by their Authorized Service Centres for services provided under warranty on products sold between April 2006 and June 2007. The Revenue argued that the Cenvat Credit availed by the appellant did not qualify as input service under the Cenvat Credit Rules, 2004, as the services were provided post-sale of goods and did not have a nexus with the manufacture and clearance of products. However, the Tribunal referred to a precedent ruling where a similar issue was addressed, and it was held that Service Tax paid on expenses incurred for providing warranty services were entitled to input service credit. Therefore, the Tribunal allowed the appeal on this issue as well, stating that no extended period of limitation is applicable. The appellant was granted relief, and any consequential benefits were to be provided in accordance with the law.