TMI Blog2011 (2) TMI 677X X X X Extracts X X X X X X X X Extracts X X X X ..... /- for the period from August 2008 to May, 2009, confirmed by the Commissioner along with interest against the Appellant and imposition of penalties of equal amount on them under Rule 15 of Cenvat Credit Rules, 2004, vide order in original Nos. 47-48/NS/Adjn./09 dated 30-10-2009 passed by the Commissioner of Central Excise and Customs, Delhi-IV and also for stay on recovery thereof till the disposal of the appeals. 2. The Appellant are engaged in the manufacture of excavator-loaders and earth moving machines, chargeable to central excise duty under Chapter 84 of the Central Excise Tariff Act, 1985. They also avail cenvat credit of central excise duty paid on the inputs and capital goods and of service tax paid on the input services, as per the provision of Cenvat Credit Rules, 2004. The Appellant in respect of the excavator-loaders and earth moving machines sold to their customers, provide free after sale repair and maintenance services during the warranty period and for providing such services, they have agreements with their dealers. In terms of their agreements, the dealers provide after sale service of repair and maintenance to the customers of the Appellant and while the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tomers, they have agreements with the dealers who provide free repair and maintenance services to the Appellant s customers and send the bills for the same to the Appellant who make payment to the dealers, that free after sale service provided to the customers is an activity related to the business of the Appellant and hence, the same is covered by the definition of the input service ; that the expression in the inclusive part of the definition of input service in Rule 2(l) of Cenvat Credit Rules, 2004 - the activity 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 , is not an exhaustive expression and would cover all the activities relating to the business of manufacturer; that the aforesaid services during warranty period provided to customers being in respect of sale of excavator-loaders and earth moving machine are activity relating to business and the same would also fall within activities relating to sales promotion; that although the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant are not even a service recipient, as the services of repair and maintenance are received free of charge by the customers of the Appellant, who are the owners of the equipment; that the services, in question, were provided by the dealers to the customers of the Appellant beyond the point of removal of the goods and at the time of providing free service to the customers, the ownership/title of the goods was not with the Appellant and as such this service cannot be treated as input service within the meaning of this term as defined in Rule 2(l) of the Cenvat Credit Rules, 2004; that the judgment of the Tribunal relied upon by the Appellant in their memorandum of appeal - Rohit Surfactants Pvt. Ltd. v. C.C.E., reported in 2009 (240) E.L.T. 472 (T.) = 2009 S.T.R. 169 (Tri.), C.C.E., Mumbai v. GTC Industries reported in 2008 (12) S.T.R. 468 (Tri.-LB.) and C.CE., Raipur v. Raipur Rotocast Ltd. reported in 2010 (18) S.T.R. 466 (Tri.) are not applicable to the facts of these cases, as in those cases, the services in respect of which cenvat credit was sought to be denied had been received by the assesees, while in the present case, the service, in question, - free repair and mainte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugned order in original can be waived in terms of the proviso to Section 35F of the Central Excise Act, 1944 for hearing of their appeals. In terms of the proviso to Section 35F, if the appellate authority is of opinion that the pre-deposit of duty, interest and penalty demanded would cause undue hardship to such person, the pre-deposit can be waived subject to such conditions as he or it may deem fit to impose so as to safeguard the interests of revenue. Hon ble Allahabad High Court in the case of L.G. Electronics India Pvt. Ltd. v. C.C.E., Noida reported in 2009 (16) S.T.R. 136 (All.) has held that uniform view of the various High Courts of the country on the question of the pre-deposit of duty and penalty under Section 35F has been that while considering provisions of the pre-deposit of duty and penalty, the authority concerned has to examine the question whether the Appellant has a good prima facie case so as to justify the dispensation of requirement of pre-deposit of the disputed amount of duty and penalty and the authority must exercise its discretion to dispense with such requirement particularly, in a case where Appellant satisfies the appellate authority that his case is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices, in question, cannot be considered. 9. As regards the main question as to whether the free after sale services of repair and maintenance provided to customers of the Appellant during the warranty period is covered by the definition of the term input service or not, our prima facie finding on this issue are under :- 9.1 Definition of input service , as given in Rule 2(l) of the Cenvat Credit Rules, 2004 as under :- (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 rat ..... 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