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TMI Blog2023 (12) TMI 601X X X X Extracts X X X X X X X X Extracts X X X X ..... zed dealers. The cost of such warranty service was included in the cost of goods sold as per Cost Accounting Standards (CAS). The Appellant entered into an agreement with its authorized dealers for providing such warranty services on its behalf for which the dealer does not charge any amounts from the customers but recovers such amounts from the appellant by raising a sale invoice/debit note which included a component of service tax. The appellant make payments to the authorized dealer and availed the credit of service tax. Both consideration and service tax amounts were paid by the appellant. 2.1 The Department issued a Show Cause Notice dated 07.02.2011 for the period January 2010 to December 2010 proposing to deny the CENVAT credit of service tax paid to the dealers in relation to such after sales services as the said services were allegedly not used in or in relation to manufacture of products and hence could not be covered in the definition of input service as provided under Rule 2(l) of the CCR, 2004. 2.2 After following due process, the Additional Commissioner vide order dated 27.09.2011 confirmed the demand of Rs. 15,41,338/- alongwith a penalty of Rs. 1,00,000/-. 2.3 Ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s-integra and the Tribunal in the following cases has held that the repair services rendered by the dealers during the period of warranty, is covered under the definition of 'input service'. (i) Johnson Controls Hitachi Air Conditioning India Ltd. v. CCE & ST- Ahmedabad, 2022-TIOL-579-CESTAT-AHM: (ii) M/s New Holland Construction Equipment Pvt. Ltd. v. Commissioner of Central Excise. Ujjain, 2021- VIL-282-CESTAT-DEL-ST: (iii) Commissioner of Central Excise, Vadodara-II v. Danke Products 2009 (16) STR 576 (TRI.-AHMD.); (iv) Carrier Air-conditioning and Refrigeration Ltd. v. CCE Gurgaon, 2016 (41) STR 1004 (Tri.-Del.); (v) Coca Cola India Pvt. Ltd. v. Commissioner of Central Excise, Pune-III 2009 (15) STR 657 (Bom.); (vi) Zinser Textiles Systems Pvt. Ltd. v. CCE Ahmedabad, 2014 (33) STR 301 (Tri.- Ahmd.); (vii) Leroy Somer India Pvt. Ltd. v. CCE Noida, 2015 (39) STR 466 (Tri.-Del.); (viii) Reliance Industries Ltd. v. CCE & ST-LTU, Mumbai 2022 (380) ELT 457 (Tri.- LB); (ix) Commissioner of Central Excise, Ludhiana v. Ambika Overseas, 2012 (25) STR 348 (P & H); (x) Elgi Equipments Ltd. v. CCE Coimbatore, 2017 (51) STR 457 (Tri.-Chennai) (xi) Gujarat Forging Ltd. v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the Hon'ble Punjab and Haryana High Court at Chandigarh which has been admitted vide CEA No. 72 of 2019 and the same is pending for decision as on date. 5.2 He further submits that the decision in the case CCE, Nashik vs. Mahindra & Mahindra Ltd. 2012 (28) STR 382 (Tri.-Mumbai) relied upon by the appellant has also been challenged by the Department before the Hon'ble Bombay High Court and the same has been admitted vide CEA No. 36 of 2013 which is pending for decision as on date. 5.3 Ld. Authorized Representative further submits that once an appeal has been admitted in higher forum against any order of lower authority, then the said decision of lower authority cannot be said to have attained finality and correctness of the judgment becomes wide open. In support, he relied upon the decision of the Hon'ble Apex Court in the case of UOI vs. West Coast Paper Mills Ltd. 2004 (164) ELT 375 (SC). 5.4 He further submits that as per sale service rendered in this case by the dealers authorized service stations on behalf of the assessee during the warranty period of vehicles are in no way used directly or indirectly in or in relation to the manufacture of final products or their clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacturer, 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 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, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal; but exclude, Xxxxxxxxxxx xxxxxxxxxxx xxxxxxxxxxx" (emphasis supplied) 21. Rule 2(l), as it stood prior to 01.04.2011, is also reproduced below : 5. 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 produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the amount of service tax paid for the services provided by the dealers to the customers on behalf of the appellant for fulfilling the warranty obligations of the appellant. 28. The ratio of the decisions relied upon by the appellant is squarely applicable to the instant case and relying upon the aforesaid decision, we find that the credit on warranty service provided free of cost during the warranty period through third parties cannot be denied. 29. As regards, the invocation of extended period of limitation, we hold that there does not exists any reason for invoking the extended period of limitation as the issue involved in the present case has already been decided in favour of the appellant. Moreover, the department did not bring any material on record to show that the appellant has suppressed the material facts with intend to evade payment of service tax. Besides this, the audit of the record of the appellant was conducted in February/March 2007 whereas the show cause notice was issued in 2009 after the expiry of two and half years which makes the substantial demand beyond the period of limitation. 30. In view of our discussion above, the impugned orders are set-aside ..... X X X X Extracts X X X X X X X X Extracts X X X X
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