TMI Blog2023 (12) TMI 601X X X X Extracts X X X X X X X X Extracts X X X X ..... r, it is found that this Tribunal in various decisions relied upon by the appellant on identical issues has consistently held that the assessee is entitled to cenvat credit of service tax paid on Repair and Maintenance during the warranty period as the same fall within the ambit of Input Service as provided in Rule 2(l) of CCR, 2004. The impugned order is not sustainable in law - Appeal allowed. - Mr. S. S. GARG, MEMBER (JUDICIAL) AND Mr. P. ANJANI KUMAR, MEMBER (TECHNICAL) Shri R. K. Hasija, Shri Shivang Puri, Advocates for the Appellant Shri Shivam Syal, Authorised Representative for the Respondent ORDER The present appeal is directed against the impugned order dated 29.03.2012 passed by the Commissioner (Appeals) of Central Excise, Faridabad (Haryana) whereby the Commissioner (Appeals) has rejected the appeal of the appellant and upheld the order-in-original. 2. Briefly the facts of the case are that the appellant are engaged in the manufacture of cranes and earthmoving machinery and are availing CENVAT credit of the duty paid on inputs and service tax paid on the input services used in or in relation to the manufacture of the final product or ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit cannot be denied. 4.1 He further submits that the CESTAT, Chandigarh Bench while deciding the identical issue on similar facts pertaining to Excavator Loaders Earthmoving Machines in JCB India Ltd v. Commissioner of Central Excise Delhi-IV. Faridabad (2023-TIOL-356-CESTAT-CHD) allowed the appeal of the appellant and held that the assessee is entitled to cenvat credit of service tax paid for the services provided by the dealers to the customers on behalf of the assessee for fulfilling the warranty obligations of the assessee. 4.2 Ld. Counsel also relied upon the decision in the case of CCE. Nashik v. Mahindra Mahindra Ltd (2012 (28) S.T.R. 382 (Tri. Mumbai) and Commissioner of C. Ex., Vadodara-II v. Danke Products 2009 (16) S.T.R. 576 (Tri. - Ahmd.), wherein also it has been held by the Tribunal that the assessee is entitled to cenvat credit. 4.3 Ld. Counsel further submits that the warranty obligations enhance the marketability of the final products, and thus have a significant role to play in increased sale of the final products. He further submits that as the sale of goods is integrally connected in relation to the manufacture of goods, the services in the presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in or in relation to the manufacture of final product and does not appear to be covered in the definition of input service whereas the impugned order was given on the basis of additional grounds, viz. That after sale services were provided by dealers on behalf of appellants to its customers were beyond the place of removal of goods; At the time of providing such services, the ownership of the goods was not with the Appellants and the Appellants were neither the service provider nor the service receiver and further that there is no indication on the excise invoice that cost of providing free service is included in the assessable value of goods. 4.5 Ld. Counsel further submits that the Ld. Commissioner has not taken into account the Chartered Accountant's Certificate produced by the appellant establishing that the expenses in relation to after sales services are included in the cost of goods, on which excise duty was appropriately paid and the expenses on account of warranty claim are specifically included under the heading of 'Selling Overheads . 5. On the other hand, the Ld. Authorized Representative reiterated the findings in the impugned order and they have filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal that the free service sale services of the vehicle provided during warranty period is an input service for the manufacturer i.e. the appellant in this case. Therefore, we do not find any merit in the impugned order, the same is set-aside. 6.1 Further, we find that this issue has also been considered by this Tribunal recently in the case of JCB India Ltd. cited (supra) wherein this Tribunal on identical facts has considered various decisions rendered on the issue of cenvat credit of service tax paid on repair and maintenance service during the warranty period and has also considered the definition of input service prior to 01.04.2011 and after 01.04.2011 and held as under:- 19. The issue, therefore, that arises for consideration in the present appeal is whether CENVAT credit of service tax paid by the appellant on repair and maintenance services provided by the dealers for fulfilling the warranty obligations of the appellant has been denied for good and valid reasons. 20. To examine this issue, it would be necessary to reproduce the relevant portion of the definition of input service , as defined in rule 2(l) of the Credit Rules. Rule 2(l) was substituted by Notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service on the final products manufactured by it. The dealers provide the services and the appellant pays service tax on the amount paid by it to the dealers. The service is provided free of cost by the dealers during the warranty period but the appellant makes payment to the dealers for the services they provide to the customers. The repair and maintenance services are, therefore, linked to the sale. The services are, therefore, used indirectly in relation to the manufacture of final products. 24. Further, we also find that the department has filed appeals before the Hon ble High Court where the Tribunal has given the relief to the assessee but the decisions of the Tribunal in those cases have not been stayed and hence, the ratio of the said decisions are binding on the lower authorities. 25. Further, we also find that the department has not been able to distinguish the latest two decisions of the Tribunal in the case of Johnson Controls Hitachi Air Conditioning India Ltd. and M/s Case New Holland Construction Equipment (I) Pvt. Ltd. cited (supra) involving identical issues wherein all earlier decisions of the Tribunal were considered and thereafter, the demands were droppe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Keshav Adke vs. Govind Joti Chavare16. We are bound to follow the earlier judgment which is precisely on the point in preference to the later judgment which has been rendered without adequate argument at the Bar and also without reference to the mandatory provisions of the Act. 42. In this view of the matter, the appellant correctly availed CENVAT credit on the amount of service tax paid for the services provided by the dealers to the customers on behalf of the appellant for fulfilling the warranty obligations of the appellant. 43. The order dated 25.05.2018 passed by the Commissioner (Appeals), therefore, cannot be sustained and is set aside. The appeal is, accordingly, allowed. 6.3 Further, we find that the contention of the Revenue is that the earlier decisions of the Tribunal in the appellant s own case as well as in the case of CCE, Nashik vs. Mahindra Mahindra Ltd. cited (supra), the department has filed appeal which is pending before the Hon ble High Court of Punjab and Haryana and Hon ble High Court of Bombay will not help the case of the Revenue because in both the cases only appeal has been admitted and no stay granted. 6.4 Further, we find that this Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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