Calling the Situation Grim, the Supreme Court Takes Suo Motu Cognizance of Delays in NCLT Approvals  ||  Supreme Court: Admission of a Claim by a Resolution Professional is Not Debt Acknowledgment  ||  Supreme Court: Public Figures Must Exercise Caution as Their Words Have Consequences in Society  ||  SC: State Must Act as a Model Employer, Criticising the Union For Not Regularising ISRO Workers  ||  J&K&L High Court: Minor Minerals Have Major Environmental Impacts and Must be Regulated  ||  Del HC: Unexplained Money Received by Public Servant is Not Bribery Without Proof of Official Favour  ||  Del HC: There is No Absolute Bar on Granting Co-Convicts Parole/Furlough Together in Suitable Cases  ||  Bom HC: LARR Authority Can Examine Limitation Issues in Land Acquisition References under 2013 Act  ||  MP HC: Long-Serving Employees Cannot Be Denied Regularisation by Retrospective Statutory Amendments  ||  J&K&L HC: Routine Challenges to Lok Adalat Awards Defeat Their Purpose of Quick Dispute Resolution    

C.C.E. & S.T.-Rajkot Vs. Falcon Pumps Private Limited - (Customs, Excise and Service Tax Appellate Tribunal) (01 Mar 2023)

Cenvat credit on the service of Repair and Maintenance during warranty period is allowable

MANU/CS/0089/2023

Service Tax

The issue involved is that whether the Appellant is entitled for cenvat credit in respect of after sale service provided during warranty period of the sale of the goods manufactured by the Respondent.

It is submitted that, the service provided during warranty period is after removal of the goods from the factory therefore, the service is not provided in or in relation to the manufacture of excisable goods. He submits that as per Rule 2(l) of the Cenvat Credit Rules, 2004, the only services which were provided up to the place of removal is cenvatable whereas, in the present case the service of after sales service in respect of the goods manufactured and sold by the respondent was provided after removal and sale of the pumps therefore, the cenvat credit is not admissible.

The service on which the Respondent have taken the cenvat credit is provided in the nature of Repair and Maintenance of the excisable goods i.e. pumps sold by the respondent during the warranty period. The policy of free servicing during warranty period is not under dispute. The Respondent is not collecting the service charges from the customer which is the service during the warranty period is provided free of cost therefore, the cost of such service stand included in the transaction value of the excisable goods sold by the respondent. The service charges stand included in the value of the manufacture of goods hence, it can be conveniently viewed that the activity of servicing during warranty period is in relation to the manufacture of final product. Moreover, the servicing during warranty period is a vital part of the business activity of the respondent.

Rule 2(l) particularly in the inclusion clause covers the ‘activities relating to business’ therefore, the said service during warranty period also clearly falls under the category of ‘activities relating to business’. The Respondent are entitled for the cenvat credit on the service of Repair & Maintenance during warranty period accordingly, the impugned order is upheld. Revenue’s appeal is dismissed.

Tags : WARRANTY PERIOD   CENVAT CREDIT   ELIGIBILITY  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved