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2016 (11) TMI 867 - CESTAT ALLAHABAD

2016 (11) TMI 867 - CESTAT ALLAHABAD - TMI - CENVAT credit - input services - after sales service, warranty services - Held that: - reliance placed in the judgment in the case of Commissioner of Central Excise, Nashik Versus Mahindra & Mahindra Ltd. [2012 (8) TMI 530 - CESTAT, MUMBAI] wherein it was held that Service tax paid on the expenses incurred for providing warranty service were entitled for input service credit. CENVAT credit allowed - appeal allowed - decided in favor of appellant. - A .....

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rs-in-Original No. 15-18/COMM/NOIDA/2010-11 & 39/COMMISSIONER/NOIDA/2012-13 dated 21/12/2010 & 16/11/2012 respectively passed by Commissioner of Central Excise & Customs, Noida. 2. Appeal No. E/701/2011 was allowed to be heard for early hearing through Misc. Order No. 70387/2016 dated 19/08/2016, wherein it was also ordered to tag Appeal No. E/55880/2013. Therefore, both the appeals are heard and being decided together. As a result MISC Application No. E/MISC/70405/2016 for early hea .....

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g the warranty period of the product. The cost of services provided by Authorized Service Centers was reimbursed by the appellant. Authorized Service Centers used to pay Service tax and appellants used to take Cenvat credit of such Service tax paid by Authorized Service Centers. It appeared to Revenue that the services provided by Authorized Service Centers (ASCs) were not input services for the manufacture of goods manufactured and cleared by appellants. Therefore, it appeared to Revenue that S .....

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proposing recovery of Service tax credit of ₹ 1,28,83,144/- under Rule 14 of Cenvat Credit Rules, 2004. Subsequently, for the period from June, 2009 to October, 2009 another Show Cause Notice on the same line was issued on 10/05/2010 with a proposal to recover Service tax credit of ₹ 66,98,367/- under the same provision of Rule 14 of Cenvat Credit Rules, 2004. Subsequently, for the period from November, 2009 to September, 2010 a Show Cause Notice on similar line was issued on 10/11/ .....

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and, therefore, the said credit of Service tax was not admissible to the appellants. In view that the Original Authority confirmed the demand of ₹ 4,49,08,666/- under Rule 14 of Cenvat Credit Rules, 2004. Subsequently, the appellants were issued with a Show Cause Notice dated 27/09/2011 on same lines covering period from October, 2010 to February, 20111 wherein it was proposed to recover Service tax credit amounting to ₹ 78,63,975/- under Rule 14 of Cenvat Credit Rules, 2004. The sai .....

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/2012 was challenged before this Tribunal through appeal which is bearing Appeal No. E/55880/2013. 4. Heard the ld. Counsel for the appellant who has argued that as held by Hon ble Supreme Court in the Case of Union of India & ORS. Versus Bombay Tyre International Ltd. reported at 1983 (14) E.L.T. 1896 (S.C.) the cost incurred towards providing warranty to the customers by the manufacturer is included in the assessable value of the goods manufactured by any manufacturer and that it is includ .....

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argued that definition of transaction value which is basis for valuation under Section 4 of Central Excise Act, 1944 with effect from 01/07/2000 provides that the amount charged for warranty is included in the price actually paid or payable for the goods sold and such price charged is transaction value. He has further taken us through the terms of contract between the appellant and Authorized Service Centers. The Authorized Service Centers had an obligation to repair all the goods manufactured .....

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the warranty is provided by the appellants and actually operated through the Authorized Service Centers and for providing such service Authorized Service Centers used to raise invoice on the appellant and appellant reimbursed that amount and such invoice included Service tax paid by Authorized Service Centers which was borne by appellant. He, further, argued that the cost of warranty is included in the assessable value. Therefore, warranty is related to manufacture. The Authorized Service Center .....

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i. Mumbai) wherein it has been held at Para 5.1 as follows:- 5.1 The first issue by the learned A.R. is that after sales service of the vehicle is not an input service on the ground that the service has been availed after sale of the vehicle and expenses incurred towards manufacture of the vehicle are entitled for input service credit. We have gone through the Section 4(3) of the Central Excise Act, 1944 which deals with the issue as hereinunder:- (d) transaction value means the price actually p .....

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