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TMI Blog2023 (8) TMI 788X X X X Extracts X X X X X X X X Extracts X X X X ..... d as per these part catalogue - this part catalogue is essentially the part inventory management, procurement and supply system of the parts to the dealers and through them to the ultimate customers. The maintenance repairs and construction manual, is like an idiot guide to the dealers for undertaking the work of repairs and maintenance of the vehicles ensuring compliance with the high safety standards set by Honda Motors, by use of the genuine parts supplied by the appellant. It provides how to further maintain and repair the vehicles brought to the dealers by their customers. Such standardization is absolutely essential to ensure that standard set by the manufacturer are achieved irrespective of the person or the dealer servicing the vehicle. This standardization will promote the sale of genuine parts which are supplied or sold by the appellants. Thus this manual is essential to the activities undertaken by the appellant through supply of genuine spare parts. The denial of CENVAT credit in respect of services of development of Part Catalogue and Maintenance, Repair and Construction Manual cannot be upheld. Since it is held that the credit is admissible to the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that in respect of the cases where the details relating to such transactions are recorded in the specified record for the period beginning with the 8th April, 2011 up to the date on which the Finance Bill, 2015 (i.e. 14.05.2015) receives the assent of the President (both days inclusive), the penalty shall be fifty percent of the duty so determined. The use of shall in above proviso depicts that the benefit of above proviso is available to the appellant. Since most of the demand in present case falls within applicability of above proviso, the benefit of fifty percent penalty is extended to the appellant. No exact date-wise data is available in the file. In view of the above discussion, order dated 28.12.2016 is upheld to the extent of demand and interest confirmation and appropriation therein. However the penalty is reduced to fifty percent of the duty demand for the period 08-04-2011 till 14.05.2015, in terms of proviso to Section 11 AC (1)(c) of the CX Act. For remaining period penalty equal to the duty demand confirmed shall be payable by the appellant. Order dated 28.12.2016 is modified to this effect. The adjudicating authority is directed to calculate the am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined in this notice, should not be appropriated; (c) Penalty under Rule 15(2) of CENVAT Credit Rules, 2004 read with section 11AC of the Central Excise Act, 1944 should not be imposed upon them for contravention of aforesaid rules. The Statement of Demand under sub-section 7 (A) of Section 11A of the Central Excise Act, 1944 dated 16th November 2016 asked the Appellant to show cause as to why; (a) CENVAT credit amounting to Rs.74,10,565/- (Rupees Seventy Four lac Ten Thousand Five Hundred Sixty Five only) irregularly availed on service Manuals and Annual Fee for Parts Catalogue should not be demanded and recovered along with interest from them under Rule 14 of CENVAT Credit Rules, 2004 read with Section 11A and Section 11AA of the Central Excise Act, 1944, respectively; (b) The amount of Rs.22,57,029/- (Rupees Twenty Two lac Fifty Seven Thousand Twenty Nine only) already reversed by them on account of wrongly availed CENVAT credit, as explained in this notice, should not be appropriated; (c) Penalty under Rule 15(2) of CENVAT Credit Rules, 2004 read with section 11AC of the Central Excise Act, 1944 should not be imposed upon them for contravention of afores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by them for preparation of this manual essentially qualify as input service. ➢ Customer s desire standardized services from the dealers. The service manual codifies the service operations to be undertaken by the dealers in respect of the various complaints with which the vehicle owners approach the dealers. These service manner provides the manner in which these complaints are to be handled including the manner in which the parts to be replaced etc., are stored and sold to customers while handling these complaints. So the services of preparation of the service manual are essentially input service for them ➢ As these services are squarely covered by the definition of input services the demand for the CENVAT Credit availed by them in respect of these services cannot be sustained. ➢ Extended period of limitation cannot be invoked in the present case as nothing was suppressed from the department and the unit was also audited regularly. ➢ Reliance is placed on the following decisions. Coca Cola India Pvt. Ltd. [2009 (242) E.L.T. 168 (Bom)]. Ambika Overseas [2012 (25) S.T.R. 348 (P H)]. TVS Motor Co. Ltd. [2021 (50) GSTL 184 (Mad.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or is engaged in, inter alia, the business of the development, manufacture and sale of automobiles and, through experience accumulated in such business, has acquired and possesses certain knowledge and abilities with respect to preparing certain service information relating to such automobiles; Whereas, HMI has the need for creating, updating or customizing certain service information in order to meet its requirements; and Whereas, Honda Motor is willing to provide to HMI certain specific services in connection with preparation of the said service information based on knowledge and abilities it possesses, and HMI is prepared to bear the costs incurred by Honda Motor for such services in accordance with the terms and conditions set forth herein. NOW THEREFORE, Honda Motor and HMI hereby agree as follows: Article 1. (Definitions) The following terms shall have the respective meanings as defined below where used herein with initial capital letters: (1) The term Products shall mean any automobiles that are sold within the Territory bearing any Honda Motor trademark, including those automobiles that are locally manufactured by Honda Siel Cars India Limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.4 On the sample basis appellant counsel had during the course of arguments produced a part catalogue. On page 1 of the catalogue, under the head Instruction for use of parts catalogue following is stated: ➢ This parts catalogue has been created as of July 20, 2005 Since this date, the sales practice for repair parts may have been changed or the parts may have been eliminated (listed for those not for sale). The modified information is reflected on the latest Electronic parts Catalogue (EPC). Also, refer to parts catalogue news for any change. See the parts catalogue news for any revision that is made after July 20, 2005 ➢ Also specify the part number when ordering a part. Check the model, type, serial numbers, color, maker, and the size as needed before ordering a part. Note that illustrations (part drawings) can differ from actual parts in shape. ➢ When modifications or additions to the parts catalogue are made, a revised edition will be issued at an appropriate time, with successively progressing a revision number on the cover. We recommend obtaining such revisions in order to keep your parts catalogue u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hicle. If you need to replace any parts, always use the correct parts supplied by a Honda dealer. Never use inferior quality parts. For Your Customer s Safety Proper service and maintenance are essential to the customer s safety and the reliability of the vehicle. Any error or oversight while servicing a vehicle can result in faulty operations, damage to the vehicle, or injury to others. WARNING Improper service or repairs can create an unsafe condition that can cause your customers or others to be seriously hurt or killed. Follow the procedures and precautions in this manual and other service materials carefully. For Your Safety Because this manual is intended for the professional service technician, we do not provide warnings about many basic shop safety practices (for example, hot parts - wear gloves). If you have not received shop safety training or do not feel confident about your knowledge of safe servicing practices, we recommend that you do not attempt to do the procedures prescribed in this manual. WARNING Failure to properly follow instructions an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is advertisement and not on the contents of the advertisement. Thus it is not necessary that the contents of the advertisement must be that of the final product manufactured by the person advertising, as long as the manufacturer can demonstrate that the advertisement services availed have an effect of or impact on the manufacture of the final product and establish the relationship between the input service and the manufacture of the final product. The manufacturer thereby can avail the credit of the service tax paid by him. Once the cost incurred by the service has to be added to the cost, and is so assessed, it is a recognition by Revenue of the advertisement services having a connection with the manufacture of the final product. This test will also apply in the case of sales promotion. 4.9 In view of the above discussions and the decision of the Hon ble Bombay High Court denial of CENVAT credit in respect of services of development of Part Catalogue and Maintenance, Repair and Construction Manual cannot be upheld. Since we hold that the credit is admissible to the appellant we are not recording any separate finding on the issue of limitation, interest and penaltie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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