2023 (5) TMI 133

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....o its customers, during the warranty period of the 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 dea....

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.... precedents. • He further submitted that Cenvat Credit on 'Warranty Free Services' has been correctly availed in terms of Rule 3(1) of the 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 sup....

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....exists any reason for the invocation of extended period of limitation as the issue is already covered by the decision of the Tribunal in favour of the assessee. In such a situation it cannot be alleged that there is any fraud, suppression, wilful statement on the part 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 (Tr....

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....ed upon the following decisions:- • Ambuja Cements Ltd. vs. Union of India 2009 (14) STR 3 (P & H) • CCE vs. Danke Products - 2009 (16) STR 576 (Tri.-Mumbai) • CCE vs. Ultra Tech Ltd. - 2018 (9) GSTL 337 (SC) • CCE vs. Roofit Industries Ltd. - 2015 (319) ELT 221 (SC) • CCE vs. Ispat Industries Ltd. - 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 writte....

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....nce services under the 'means' clause of the definition of 'input service' in rule 2(l) of the Credit Rules which requires the service to be "used, directly or indirectly, in or in relation to the manufacture of final products". The contention is that 'means' clause of the definition is very widely worded and words such as 'directly or indirectly' and 'in or in relation to', further expand the scope of the definition to include even those services which are indirectly used 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 dealer....

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.....04.2011, is also reproduced below : 17. 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 products upto the place of removal, and includes services used in relation to setting up, 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, 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....