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2016 (3) TMI 669 - CESTAT NEW DELHILiability of tax on extended warranty service between October 2005 and September 2010 - Business Auxiliary Services - Money received towards extended warranty - Held that:- the context in which the service becomes taxable is that of an intermediary who arranges goods or services for further business activity; the use of the words 'inputs' and 'client' as well as the explanation appended would make it appear to be so. The procurement of service which is an input for the client alone will enable classification in the sub-category of section 65(19)(iv). Service of replacing defective parts will have to be rendered by a dealer of the respondent. That service will be provided only if and when such defect exists in a car. Should the need for such replacement arise, it would be only then that the service intended for use by the client comes into play. Mere coverage by the extended warranty scheme does not, of itself, create an intention to use the service of the dealer. Therefore, no liability of tax arises under Business Auxiliary Services on money received towards extended warranty. - Decided against the department
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