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TMI Blog2022 (4) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... ecided in favor of appellant. - Excise Appeal No.13887 of 2013 and Excise Appeal No.10245 of 2020 - A/10299-10300/2022 - Dated:- 31-3-2022 - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL) Shri S.J Vyas, Advocate for the Appellant Shri G.Kirupanandan , Superintendent (AR) for the Respondent ORDER These appeals are filed by M/s Hitachi Home And Life Solutions India Ltd for denial of Cenvat Credit, demand of interest and imposition of penalty. 2. The issue involved in the instance case is if the appellants are entitled to avail Cenvat Credit of services provided by them to their customers during warranty period through a third party on free of cost basis. It is not in dispute that the credit is in respect of maintenance and repair services provided by the authorized dealers/ franchises of the appellant, to the customers, for which there is no charge on the customers and for which the appellant are paying the authorized dealers/ franchises. The Authorized dealers/franchises paid service tax on the amount received from the appellant and the appellant have claimed Cenvat Credit of the said amount. It is not in dispute all these services are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of input service in rule 2(l) of the Credit Rules which requires the service to be used, directly or indirectly, in or in relation to the manufacture of final products . The contention is that means clause of the definition is very widely worded and words such as directly or indirectly and in or in relation to , further expand the scope of the definition to include even those services which are indirectly used in relation to the manufacture of the final products. 19. The appellant further claims that the final products manufactured and cleared by the appellant are expensive and their maintenance is also costintensive for which specific training is required. The after sales services is the central pillar of the appellant s promotional strategy towards sale of its final products, since these services augment the value of final products and thus, become important considerations for the customers while purchasing such products. Accordingly, the final products carry contractual obligations of the appellant as the manufacturer of such goods, which are enumerated under the warranty policy of the final products. The dealers provide the services in accordance with the checkl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... low : prior to 01.04.2011 2(l) input service means any service,- (i) used by a provider of taxable service for providing an output service; or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal; (emphasis supplied) 23. Input service either prior to 01.04.2011 or w.e.f. 01.04.2011 means any service used by the manufacturer, whether directly or indirectly, or in relation to the manufacture of final products. The appellant is under an obligati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved from the dealers who had provided repair and maintenance service during warranty period on behalf of the appellant to the customers . The sale price of the air conditioners sold by the appellant to their consumers during the period of dispute included the warranty charges. There is no dispute that Central Excise duty had been paid on the value which included the warranty charges. During the warranty period, the 14 E/52867/2018 appellant were under obligation to provide free repair and maintenance services to the consumers, who had purchased the air conditioners from them. However, instead of providing the free repair and maintenance service directly in discharge of their obligation, the appellant roped in the dealers who provided free repair and maintenance to the consumers on their behalf and the dealers for providing this service on behalf of the appellant, received the payment from the appellant and on that amount, they paid the service tax. The point of dispute is as to whether the service provided by the dealers to the appellant is an input service and whether the appellant would be eligible for Cenvat credit in respect of the same . The service received by the appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice tax paid on availment of such input services by the manufacturer from their authorized representatives the appellant/assessee is entitled for credit of such input services. [emphasis supplied] 27. In Mahindra Mahindra Ltd., a Division Bench of the Tribunal also observed as below : 6. In view of these observations, we hold that if after sales service expenses are included in the assessable value, the assessee is entitled for input service credit on the expenses incurred on after sales charges.................. 28. In Samsung India Electronics, the appellant provided after sale service to the customers in respect of the products sold through authorized service centres and bore expenses incurred for providing such service during the warranty period. The authorized service centres paid service tax and the appellant took CENVAT credit. The Department, however formed an opinion that the services provided by the authorized service centres were not 16 E/52867/2018 input services for the goods manufactured and cleared by the appellant. The Tribunal, in view of the earlier decision of the Tribunal in Mahindra Mahindra Ltd., held that the CENVAT credit can be take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice. 32. The issue, therefore, that would arise for consideration is whether the earlier Division Bench decisions of the Tribunal in Carrier Air conditioning Refrigeration, Honda Motorcycle and Samsung India Electronics should be relied upon as precedents and the decision of the Tribunal rendered on 24.11.2017, in the own case of the appellant, should be taken to have been rendered per incuriam. 33. The learned counsel appearing for the appellant submitted that the principle of per incuriam should be applied and the Tribunal should follow the law laid down in the aforesaid three decisions of the Tribunal rendered in Carrier Air conditioning Refrigeration, Honda Motorcycle and Samsung India Electronics. 34. The principle of per incuriam has been developed in relaxation to the rule of stare decisis. While referring to exception to the rule of stare decisis, it has been observed in Precedent in England Law by Rupert Cross, 1961 Edition: No doubt any court would decline to follow a case decided by itself or any other court (even one of superior jurisdiction), if the judgment erroneously assumed the existence or non-existence of a statute, and that assumption formed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r binding precedent of a coordinate Bench and having not considered the mandatory provisions as contained in Section 15 and 29 of the Act had been rendered per incuriam. It, therefore, does not constitute a binding precedent. 38. In Yeshbai vs. Ganpat Irappa Jangam14, a Division Bench of the Bombay High Court observed: 27. Now, a precedent is not binding if it was rendered in ignorance of a statute or a rule having the force of statute. The rule apparently applies even though the earlier court knew of the statute in question. If it did not refer to and had not present to its mind, the precise terms of the statute. Similarly, a court may know of the existence of a statute and yet not appreciate its relevance to the matter in hand; such a mistake is again such incuriam as to vitiate the decision. These are the commonest illustrations of decision being given per incuriam. In order that a case can be decided per incuriam, it is not enough that it was inadequately argued. It must have been decided in ignorance of a rule of law binding on the court, such as a statute. (See the observations in Salmond on Jurisprudence Twelfth Edition, pages 150 and 169). 39. It, therefore, f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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