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TMI Blog2019 (11) TMI 232X X X X Extracts X X X X X X X X Extracts X X X X ..... are six units of the appellant and the amount shown for services mentioned in the agreement is for all the six units. Thus the appellant unit has to pay ₹ 3 lakhs as per the agreement for the entire services provided. The adjudicating authority has apportioned the whole amount of ₹ 3 lakhs towards customer care services without any basis and thereafter rejected the credit. It is indeed the allegation stated in the SCN that appellant has availed credit of service tax paid on sales promotion and customer care services. Then findings of the adjudicating authority that the entire amount is for customer care services cannot sustain. The manufacturer has to maintain the customer sales / help line / cell for redressing the customer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacture of Glazed Wall Tiles and are registered with the Central Excise department. They are availing the facility of cenvat credit of duty paid on inputs, capital goods and input services. On scrutiny of accounts of the assessee for the period from November 2010 to May 2015 and June 2015 and June 2017, it appeared that they have wrongly availed credit of input services under the category of Sales Promotion Service / Customer Care Services . Show cause notices were issued to the appellant proposing to disallow the credit and also for recovery of the same along with interest and to impose penalties. After due process of law, the original authority confirmed the demand, interest and imposed penalty which was upheld by the Commissioner (Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the business associates including counter staff, mason etc. of the dealers and distributors. ii. Organise training programs iii. Facilitate all supplementary service for conducting training programs iv. Maintain training centers. IV. Such other services as may be mutually agreed upon by the Parties from time to time. As per the agreement, ₹ 12 lakhs is for sales promotion, ₹ 3 lakhs for customer care services along with other such services and ₹ 3 lakhs for training services. The department has confused the amounts stated in the agreement which can be seen from the discussion of original authority in para 4.6 of the OIO wherein it is observe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmodity. Such customer care cell helps the consumers to seek redressal of their complaint and creates confidence of the product among public and thereby augments the sales of the product. Thus indeed, the services are closely related with sales promotion service. The training services are in connection to customer care services where the complaints and feedback are used to train the customer care personnels. Thus the customer care service has direct nexus with the manufacturing activity of the appellant. 3.3 The department has issued SCN 8.12.2015 invoking extended period of limitation. Though in the SCN, it is stated that appellant has suppressed facts, there is no evidence adduced by the department to establish the same. Fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the amounts shown in the invoices, Ld. A.R submitted that the arguments put forward by the appellant do not clearly establish why invoices were raised for ₹ 3 lakhs only when as per agreement the amount to be paid for after sales service is R.12 lakhs. This indicates that the amount of ₹ 3 lakhs is only for customer care services. 5. Heard both sides. 6. The issue is with regard to availment of credit on input services which are in the nature of sales promotion service / customer care service. It has to be noted that the period involved is from November 2010 to May 2015 and June 2015 and June 2017. Thus period involved is after 1.4.2011 as well as prior to this date. For the period prior to 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in the SCN that appellant has availed credit of service tax paid on sales promotion and customer care services. Then findings of the adjudicating authority that the entire amount is for customer care services cannot sustain. 8. The strong argument put forward by the department is that there is no warranty offered by appellant for goods at the time of sales and therefore services availed for customer care are in the nature of after sales activity. Every manufacturer is liable for the inherent manufacturing defect of the product. It is not only in cases where express warranty is offered that the manufacturer is liable for the defects, as argued by the Ld.AR for department. Every product has an implied warranty that it will ..... X X X X Extracts X X X X X X X X Extracts X X X X
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