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2023 (7) TMI 50 - AT - Central ExciseRecovery of CENVAT credit - input services - after-sale services - repair and maintenance for the products covered under warranty on a free of cost basis - whether the consideration received for those warranty services was part of transaction value? - extended period of limitation - HELD THAT:- This Tribunal in the case of M/S PIPAVAV SHIPYARD LTD. VERSUS COMMISSIONER, CENTRAL EXCISE & SERVICE TAX, BHAAVNAGAR [2015 (8) TMI 58 - CESTAT AHMEDABAD] has interpreted Rule 2(l)(i) of the Rules, observing that the expression "any service" read with "for providing an output service" would cover wide encompass of the definition of input service. All taxable services without which the providing of output service/manufacture of final products would be impossible or commercially inexpedient, would be covered herein - thus any service, which either has any nexus to the activity of manufacturing or if it is in relation to the business of manufacture of goods would get covered under the definition of input service - It is also observed that the value of such service is included in their assessable value, it follows that the credit thereon is admissible as per intent of Cenvat Credit Scheme. Thus service in question of providing warranty and after sales services is the input service eligible for Cenvat. Whether the warranty charges forms part of the assessable value of the final product on which Central Excise duty is paid by the Noticee? - HELD THAT:- As already observed that the cost of the disputed services forms part of the assessable value of the final products and on same applicable service tax has already been discharged as and when due. The Hon'ble Supreme Court in UNION OF INDIA & ORS. ETC., ETC. VERSUS BOMBAY TYRE INTERNATIONAL LTD. ETC., ETC. [1983 (10) TMI 51 - SUPREME COURT], has held that all the elements which enrich the value of the excisable goods and contribute to its marketability, must form part of the manufacturing cost of the goods. The intent of Cenvat Credit scheme is to reduce the cascading effect of taxes by preventing the build-up of taxes in the cost of products. Therefore, a manufacturer should be entitled to avail Cenvat credit of Service Tax paid on all those services, the cost of which is getting included in the assessable value of the final product. By not allowing the Cenvat Credit on such services would be against the intent of Cenvat Credit scheme - the Cenvat credit in relation to warranty services, value whereof is included in the assessable value of final product is available to the appellant as it contributes to the marketability of the product. Extended period of limitation - HELD THAT:- All the facts in the present case were in the knowledge of the Department as the appellant had regularly filed the statutory returns and the Department had conducted audits of the appellant on a regular basis. The appellant always co-operated with the Department in their proceedings and had always provided the details asked for by the Department. It is settled law that extended period cannot be invoked when the department was aware of all the facts - thus, extended period has wrongly been invoked by the department while issuing the show cause notice. The issue/s as framed stand decided in favour of the appellant - Appeal allowed.
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