Appellant correctly availed CENVAT credit on service tax paid for warranty services provided by dealers to customers CESTAT Chandigarh allowed the appeal regarding CENVAT credit on after-sales service. The Tribunal held that the appellant correctly availed CENVAT credit ...
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Appellant correctly availed CENVAT credit on service tax paid for warranty services provided by dealers to customers
CESTAT Chandigarh allowed the appeal regarding CENVAT credit on after-sales service. The Tribunal held that the appellant correctly availed CENVAT credit on service tax paid for warranty services provided by dealers to customers on appellant's behalf. The department failed to produce evidence of suppression of facts with intent to evade service tax payment, making the extended limitation period inapplicable. The decision relied on previous Tribunal rulings in similar cases involving the same appellant.
Issues involved: Appeal against the order confirming demand of duty, interest, and penalty by the Ld. Commissioner of Central Excise, Faridabad, Haryana.
Summary:
Issue 1: Admissibility of CENVAT Credit on after-sales services during warranty period The appellant, engaged in manufacturing earth moving machineries, provided free services to customers during the warranty period through dealers. The tax paid by dealers on after-sales services was claimed as credit under CENVAT Credit Rules. Two show cause notices were issued proposing to deny the credit, leading to the present appeals. The appellant argued that the issue had been decided in their favor previously by the Tribunal and cited various decisions supporting their claim. The Tribunal, considering the submissions and prior rulings, allowed the appeal, stating that the services were indirectly related to the manufacture of final products, and there was no evidence of suppression by the appellant to evade service tax.
Decision: The Tribunal allowed both appeals, setting aside the impugned order and providing consequential relief as per law. The Tribunal emphasized that the credit on warranty services provided free of cost during the warranty period through third parties cannot be denied. The department failed to show any suppression on the part of the appellant to evade service tax, leading to the decision in favor of the appellant.
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