Warranty repair services can qualify as input service credit when they are integral to the sale of goods.

Warranty repair charges paid to dealers during the warranty period were treated as eligible input service credit under the Cenvat Credit Rules, 2004, because repair and maintenance undertaken under warranty was regarded as activity relating to the sale of goods. Following its earlier view in the manufacturer's own case, the Tribunal held that the service tax paid on such dealer repairs qualified for credit, and the denial of input service credit was unsustainable.

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Issues: Whether service tax paid on warranty repair charges paid to dealers during the warranty period qualified as input service credit under the Cenvat Credit Rules, 2004.

Analysis: The Tribunal followed its earlier decision in the appellant's own case for an earlier period and applied the settled principle that repair and maintenance during the warranty period is an activity relating to sale of goods. On that basis, the service charges paid to dealers for warranty repairs were treated as eligible input services for the manufacturer.

Conclusion: The appellant was entitled to input service credit on the warranty repair charges paid to dealers, and the denial of credit was unsustainable.

Ratio Decidendi: Repair and maintenance undertaken during the warranty period, being integral to the sale of goods, qualifies as an activity relating to sale of goods and supports input service credit.

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