TaxTMI 
TaxTMI 
TaxTMI 
2023 (5) TMI 133
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....machines sold. * For this purpose, the appellant entered into a contractual relationship with its dealers, who are requested to provide the aforesaid free service to the customers, on behalf of JCB India Limited. Pursuant to aforesaid contractual relationship, the dealers of the appellant render free service to the customers concerned, which service is rendered on behalf of the appellant. The dealer does not charge anything from the customer in this regard inasmuch as, the contract for rendition of service is with the appellant and not with customer concerned. * For rendition of aforesaid services, the dealers of appellant charges JCB India Limited. This service is subject to service tax and accordingly, the dealers admittedly pay service tax on the aforesaid services rendered to the appellant. This service tax so paid is in turn charged and recovered from the appellant and the appellant being entitled in law, takes Cenvat Credit thereof under Cenvat Credit Rules, 2004. * During the course of audit conducted by the department, it was noticed that the appellant paid certain payment to their dealers which they claimed to be charges after sale services provided by the dealers fr....
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.... Cenvat Credit Rules, since such services are covered under rule 2(l) of Cenvat Credit Rules, 2004. * The in-warranty 'repair and maintenance services' rendered by dealers are covered under 'means' clause of the definition of "input service'. The repair and maintenance were received by the appellant from the dealers to fulfil warranty obligations annexed to the final products manufactured and cleared by the appellant. Such warranty obligations enhance the marketability of the final products, thereby having a significant role to play in increased sale of the final products by the appellant. As the sale of goods is integrally connected in relation to the manufacture of goods, the services in question were used indirectly in relation to the manufacture of final products and the same would fall under the definition of "input service'. * The Ld. Counsel further submitted that this issue is no more res-integra and has already been decided in favour of the assessee by various decisions of the Tribunal. In support of his submissions, he relied upon the following judgements:- (i) Order-in-Appeal No. C. Appeal - favour- 38/CE/CGSTAppeal- Gurugram/SG/2019 dt. 31.05.2019 (ii) Com....
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.... of the appellant. He also submitted that audit of the appellant was conducted on 28/30.03.2007 and 03/04/.02.2007 whereas the show cause notice was issued on 26.02.2009. When the department was itself aware of all the facts in the year 2007 itself and the show cause notice was issued after two and half years and the substantial demand is beyond the period of limitation. 7. On the other hand, the Ld. DR filed written submission and additional written submissions supporting the impugned order and submitted that the Tribunal in the cases of Commissioner vs. Mahindra & Mahindra Ltd. - 2014 (34) STR. J207 (Bom.) and M/s Danke Products cited (supra) has not separately examined the definition of 'input service' and the concept of place of removal in the context of the definition of 'input service' and just relied upon the decision of the larger bench of the Tribunal in the case of M/s ABB Ltd. vs. CCE-2009 (15) STR 23 (Tri.-LB.). He also submitted that the larger bench of the Tribunal in the case of M/s ABB Ltd. has categorically mentioned that valuation of goods and eligibility of cenvat credit are independent of each other and has no relevance to each other. He further submitted that ....
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.... - 2015 (324) ELT 670 (SC) * Deepak Fertilizers & Petrochemicals Corpn. Ltd. - 2013 (32) STR 532 (Bom.) * Ultra Tech Cement Ltd. vs. Commissioner- 2018 (13) GSTL. J101 (SC) * CCE vs. Indian Special Castings (P) Ltd. - 2008 (227) ELT 332 (Tri.-Del.) * Ultra Tech Cement Ltd. vs. CCE-2019 (366) ELT 891 (Tri.- chan.) * Carrier Airconditioning and refrigeration Ltd. 2016-TIOL-450- CESTAT-CHD * Samsung India Electronics Pvt. Ltd. vs. CCE - 2017-TIOL-05- CESTAT-ALL * Case New Holland Construction Equipment (I) Pvt. Ltd. vs. CCE 2018-TIOL-33-CESTAT-DEL * Commissioner vs. Ultratech Cement Ltd. - 2014 (36) STR J70 (S.C.) * CCE vs. Neminath Fabrics ltd. - 2010 (256) ELT 369 (Guj.) 11. Further, in his additional written submission, the Ld. DR stated that the decisions of the Tribunal in the case of Carrier Airconditioning and Refrigeration Ltd. and Honda Motorcycle & Scooter India Pvt. Ltd. cited (supra) have not been accepted by the department and the appeals have been admitted by the respective jurisdictional High Court against the said orders. 12. In reply to the additional written submissions, the appellant has also filed written submission stating that the Commissioner....
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.... in relation to the manufacture of the final products. 18. The appellant further claims that the final products manufactured and cleared by the appellant are expensive and their maintenance is also cost-intensive for which specific training is required. The after sales services is the central pillar of the appellant's promotional strategy towards sale of its final products, since these services augment the value of final products and thus, become important considerations for the customers while purchasing such products. Accordingly, the final products carry contractual obligations of the appellant as the manufacturer of such goods, which are enumerated under the warranty policy of the final products. The dealers provide the services in accordance with the checklist provided by the appellant. The appellant also contends that it manufactured the final products with the sole intention to sell them and thus, sale of goods is integrally connected in relation to the manufacture of goods. The contention, therefore, is that since the repair and maintenance services are fundamentally linked to sale and sale directly affects the manufacturing activities, the services were used indirectly in....
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....an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal;" (emphasis supplied) 22. 'Input service' either prior to 01.04.2011 or w.e.f. 01.04.2011 means any service used by the manufacturer, whether directly or indirectly, or in relation to the manufacture of final products. The appellant is under an obligation to provide after sale service on the final products manufactured by it. The dealers provide the services and the appellant pays service tax on the amount paid by it to the dealers. The service is provided free of cost by the dealers during the warranty period but the appellant makes payment to the dealers for the services they provide to the customers. The repair and maintenance services are, therefore, linked to the sale. The services are, therefore, used indirectly in relation ....