TaxTMI 
TaxTMI 
2023 (5) TMI 429
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....)15A-25/M-01/2011 dated 31.01.2011 for being recovered alongwith accrued interest thereon, at the applicable rates, from M/s Mahindra & Mahindra Limited (Automotive Division), Akurli Road, Kandivali (East), Mumbai - 400 101, in terms of Rule 14 of the CENVAT Credit Rules, 2004 readwith now Section 11A(10) and Section 11AA of the Central Excise Act, 1944; and ii. I impose a penalty of Rs. 24,85,647/- (Rupees twenty four lakhs eighty five thousand six hundred forty seven only) upon M/s Mahindra & Mahindra Limited (Automotive Division), Akurli Road, Kandivali (East), Mumbai-400 101 under Section 11AC of the Central Excise Act, 1944;" 2.1 Appellant is engaged in manufacture of wide range of automotive vehicles and parts thereof which are sold through country-wide network dealers. Appellant at the time of sale of the vehicles also provided to the customer an owner's manual through the dealers having four to five detachable coupons relating to after sale service of the vehicle. After the sale service can be availed by the customer after expiry of the specified period of time or upon the running of the said vehicle upto specified mileage, whichever is earlier. 2.2 On the ba....
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....dicial precedents, the appeal should be allowed in their favour. The issue involved is no longer res integra and decided in the following cases:- Carrier Airconditioning & Refrigeration Ltd. [2016 (3) TMI 124 - CESTAT NEW DELHI] Samsung India Electronics Pvt. Ltd. [2016 (11) TMI 867 - CESTAT ALLAHABAD] Escorts Construction Equipment Ltd. [2018 (8) TMI 943 - CESTAT CHANDIGARH] Honda Motorcycle & Scooter India Pvt. Ltd. [2018 (12) TMI 929 - CESTAT NEW DELHI] Honda Motorcycle & Scooter India Pvt. Ltd. [2019 (4) TMI 927 - CESTAT CHANDIGARH] Case New Holland Construction Equipment (I) Pvt. Ltd. [2021 (8) TMI 963 - CESTAT NEW DELHI] Hitachi Home and Life Solutions India Ltd. [2022 (4) TMI 130]. The entire period of dispute is prior to 01.04.2011 and the services received are covered by the "activities relating to business" used in the inclusive part of the definition of 'Input service'. Reliance is placed on decisions as follows, whereby it has been held that these services will be covered under the definition of input service as existed then i.e. prior to 01.04.2011:- Coca Cola India Pvt. Ltd. [200....
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.... credit even if these services are covered under the definition of 'input services. The term 'used' is stressed here and the usage should be in or in relation to the manufacture of final products whether directly or indirectly and clearance of final products upto the place of removal. The appellants have stressed on the point that as per the definition of 'input services' they are entitled to take Cenvat credit on these input services' as these are covered under sales promotion. Therefore, the Cenvat credit should be allowed. The same is incorrect. These services were not used in the manufacture of finished goods or clearance of the goods upto the place of removal. In the present case it is observed that the concerned services were used after the finished goods have been cleared from the place of removal. In the present case the dealers of the appellant had provided the after sales service to their customers and raised invoice on the appellant to recover the amount along with service tax paid by them. This specifically reveals that the services have been provided firstly after the goods have been cleared and secondly beyond the place of removal. Further, the....
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..... These words "whether directly or indirectly" and "whether contained in the final product or not" indicates the intention of the legislature. What the legislature intends to say is that even if the use of input (like electricity) in the manufacturing process is not direct but indirect still such an item would stand covered by the definition of "input". In the past, there was a controversy as to what is the meaning of the word "input", conceptually. It was argued by the Department in a number of cases that if the identity of the input is not contained in the final product then such an item would not qualify as input. In order to get over this controversy in the above definition of "input", the Legislature has clarified that even if an item is not contained in the final product still it would be classifiable as an "input" under the above definition. In other words, it has been) clarified by the definition of "input" that the following considerations will not be relevant: (a) use of input in the manufacturing process be it direct or indirect; (b) even if the input is not contained in the final product, it would still be covered by the definition. These cons....
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.... of production, the said item would not become an eligible input. The said expression "used in or in relation to the manufacture" have many shades and would cover various situations based on the purpose for which the input is used. However, the specified input would become eligible for credit only when used in or in relation to the manufacture of final product. Hydrogen gas used in the manufacture of sodium cyanide is an eligible input, since it has a significant role to play in the manufacturing process and since the final product cannot emerge without the use of gas. Similarly, Heat Transfer Oil used as a heating medium in the manufacture of LAB is an eligible input since it has a persuasive role in the manufacturing process and without its use it is impossible to manufacture the final product. Therefore, none of the categories in the inclusive part of the definition would constitute relevant consideration per se. They become relevant only when the above crucial requirement of being "used in or in relation to the manufacture" stands complied with. In our view, one has to therefore read the definition in its entirety. 17. As stated, the definition is in three parts, namel....
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.... of the appellants. Had the department not initiated any such scrutiny proceedings, detection of such incorrect availment of Cenvat credit on inputs etc, by the appellant would have remained un-noticed resulting in loss of revenue to the Department. The appellants had never intimated to the Department about such incorrect availment of Cenvat credit of input service. Therefore, it cannot be said that they acted under bonafide belief or that there was no suppression of facts on their part. In the case of M/s. Interscape reported in 2006(198) ELT 275 (Tri.- Mumbai), it has been held by the Hon'ble CESTAT that a bonafide only when it is formed after all the reasonable considerations are taken into account. Therefore, the appellants cannot contend at this stage that they had not suppressed any information from the department and had acted in a bonafide manner. In fact it is observed that while providing the information for the period September, 2005 to March, 2009 the appellant did not provide the information for the month of March, 2008 and the same was provided only on 11.03.2010. The information under Service Tax-3 is provided to Service Tax Department and not to the jurisdiction....
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....t include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods. By going through the said provision, we find that the transaction value means the price actually paid or which are payable for the goods when sold and those includes servicing and warranty also. Admittedly the service and warranty is post manufacturing expenses which are to be provided to the customer after sale. As per the provision of Section 4(3)(d) the value of warranty and servicing which is a post manufacturing are includible in the assessable value and therefore, these expenses incurred in the service are entitled for input service credit. 5.2 We do not find any force in the arguments of the learned A.R. that the expenses incurred after sales service is not an 'input service'. The said issue came up before this Tribunal in the case of CCE v. Danke Products (supra) wherein the facts of the case are that the appellants were engaged in the manufacture of electrical transformers and those were cleared on payment of duty. As per the terms of contract, the assessee was under obligation to repair and maintain the transformers during the warra....
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....the said repairs etc. and these repairs were undertaken by the repairer at the instance of the Appellants (who are also the manufacturers of the goods) and on their behalf and were paid for by the Appellants. In view of the above reasons as well as the fact that the repairs during warranty period are the obligation of the manufacturers, in this case the appellants and it is they who had assigned the said work to M/s. Danke Electricals and have paid for the same. I do not find merit in the contention of the Department that the impugned services were rendered to GEB and not to the Appellants. For the reasons as aforesaid, I find that the impugned services - Maintenance and Repair Services - were actually provided by M/s. Danke Electricals to the appellants and not to M/s. GEB even though the transformers during warranty period may have been received from M/s. GEB and returned to them without routing through the manufacturer." 5. As observed by Commissioner (Appeals), the respondents were under a legal obligation to provide repair and maintenance service to GEB. The value of such services already stands included in the assessable value of the transformer in terms of Section 4....
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....ties. Admittedly, the repair and maintenance of transformers, being an activity relating to the sale of goods, and hence can be said to be relevant to the business, it stand rightly concluded by Commissioner (Appeals) that service of repair and maintenance of transformers during warranty period is a service covered by definition of input service and the assessees are entitled to take Cenvat Credit of service tax paid on such services. I find no reason to take a different view." 6. In view of these observations, we hold that if after sales service expenses are included in the assessable value, the assessee is entitled for input service credit on the expenses incurred on after sales charges. Therefore, the appeal filed by the Revenue is dismissed and the appeal filed by the assessee is remanded to the adjudicating authority for verification whether after sales service charges are included in the assessable value or not as the assessee did not produce the Chartered Accountant's certificate before the adjudicating authority. Therefore, the adjudicating authority shall consider the certificate issued by the Chartered Accountant/Cost Accountant and thereafter pass an appropriate....