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2018 (6) TMI 135 - CESTAT CHANDIGARHLeviability of service tax on the free warranty service - amounts received from the manufacturer M/s. Hindustan Motors Limited under ‘Serve to Win’ reward scheme for the free services provided by them - The department took a view that the appellant had received this amount in lieu of free services provided by them to the buyers of the vehicles - Extended period of limitation - Held that:- The appellant are providing three free services during the warranty period. Admittedly, the entire cost of free service is borne by the appellant and no reimbursement is being received from the manufacturers or is being charged to the customers. The free services are being provided in pursuance to the obligation cast on the appellant by the manufacturer of the vehicles. It is not disputed by both the lower authorities that the scheme is discretionary in nature and is in the form of incentive to improve the quality of pre-delivery inspection, of three free services and for maintenance of complete control system. Hence, it is not correct to conclude that it is reimbursement for three free warranty services provided by the appellant to the buyers of the vehicles - demand set aside. Invocation of Extended period of limitation in case of second SCN - Held that:- The judicial discipline mandated that Department should not have invoked extended period in second SCN dated 26.02.2007 when the same issue had come to its notice already while issuing first SCN dated 13.04.2006 - extended period of limitation. Appeal allowed - decided in favor of appellant.
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