The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), confirmed the availability of cenvat credit on service of Repair and Maintenance during warranty period.
The issue involved is that whether the appellant is entitled for cenvat credit in respect of after sale service provided during warranty period of the sale of the goods manufactured by the respondent, Falcon Pumps Private Limited.
Vijay G. Iyengar, Assistant Commissioner (AR) appearing on behalf of the revenue reiterated the grounds of appeal and that the service provided during warranty period is after removal of the goods from the factory therefore, the service is not provided in or in relation to the manufacture of excisable goods.
The Counsel further submitted that as per rule 2(l), the only services which were provided up to the place of removal is cenvatable whereas, in the present case the service of after sales service in respect of the goods manufactured and sold by the respondent was provided after removal and sale of the pumps therefore, the cenvat credit is not admissible.
P D Rachchh, Counsel appearing on behalf of the respondent submitted that the after-sale service during warranty period is included in the term ‘in or in relation to manufacture of excisable goods. The value of such service has been included in the transaction value of the pumps sold by the respondent on which excise duty was discharged.
The Counsel further pointed out that in this fact firstly, the service was used in or in relation to manufacture of final product secondly, even if there is any demand, the service is clearly covered under the inclusion clause of service related to business activity therefore, on both the count the respondent are entitle for the cenvat credit.
The Bench comprising of Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that “We are of the clear view that the respondent are entitle for the cenvat credit on the service of Repair and Maintenance during warranty period accordingly, the impugned order is upheld. Revenue’s appeal is dismissed.”
The Bench also noted that Rule 2(l) particularly in the inclusion clause covers the ‘activities relating to business’ therefore, the said service during warranty period also clearly falls under the category of ‘activities relating to businesses.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
