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M/s. IFB Industries Limited Versus Commissioner of Central Excise & ST, Chandigarh

2018 (1) TMI 429 - CESTAT CHANDIGARH

CENVAT credit - input services - denial on the premise that during the warranty period, the appellant has provided exempted service of Repair and Maintenance - Revenue is of the view that free warranty service of Repair and Maintenance is an exempted service - Held that: - Repairs and Maintenance service is taxable service with effect from 01.07.2003 in terms of provisions of Section 65 (105) (zzg) of Finance Act, 1994 and the said activity thereafter has never been exempted by the Government by .....

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asis from head office for sale. Therefore, the appellant are selling their own goods, manufactured by them. If the person selling the goods manufactured them, in that circumstance, the appellant cannot be said that he is a trader - the appellant is not engaged in the activity of trading. - Appeal allowed - decided in favor of appellant. - Appeal No. ST/55595/2013-DB - Final Order No. 60021 / 2018 - Dated:- 4-1-2018 - Mr. Ashok Jindal, Member (Judicial) And Mr. Devender Singh, Member (Technic .....

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ey are selling the same through their various branches and the condition of sale is that, during the warranty period, the appellant shall provide service of Repair and Maintenance free of cost for the agreed period. Revenue is of the view that free warranty service of Repair and Maintenance is an exempted service therefore, for the impugned period i.e. 2006-07 and 2007-08, Cenvat credit attributable to free service of Repair and Maintenance is sought to be denied to the appellant on various inpu .....

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ing warranty period is an exempted service. In fact, the value of these services is included in the cost of the goods sold by them and it is the condition of the sale of their product that they will provide free service of Repair and Maintenance during the period of warranty. In that circumstance, it cannot be termed that they were providing exempted service although they are not charging for the same and the Repair and Maintenance services are taxable service in terms of Section 65 (105)(zzg) o .....

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, the appellant is selling their own goods and on that ground the Cenvat credit cannot be denied. He also submitted that for the subsequent period, the adjudicating authority himself has allowed the Cenvat credit to them on the said activity and the said order has not been challenged by the Revenue and therefore, the Revenue cannot take two contrary views on the same issue in the case of same assessee. In that circumstance also the demand is not sustainable. He also submitted that in their own c .....

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envat credit of the inputs/ input services availed by them. 5. Heard both sides and considered the submissions. The issue emerges before us after the arguments advanced by both sides are:- (a) Whether the service of Repair and Maintenance provided by the appellant during the period of warranty free of cost, is an exempted service or not? (b) Whether the appellant is engaged in the activity of trading or not? As regards the issue (a) above, whether the services of Repair and Maintenance provided .....

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