Case Law Details
JCB India Ltd. Vs CCE (CESTAT Chandigarh)
CESTAT Chandigarh held that CENVAT Credit on warranty service provided free of cost during the warranty period through third parties dealer cannot be denied to the manufacturer.
Facts- The appellant is engaged in manufacturing and selling of earth moving machineries. While selling, the appellant promises to provide ‘free services’ to its customers, during the warranty period of the machines sold.
The appellant entered into a contractual relationship with its dealers, who are requested to provide the aforesaid free service to the customers, on behalf of JCB India Limited. Pursuant to aforesaid contractual relationship, the dealers of the appellant render free service to the customers concerned, which service is rendered on behalf of the appellant. The dealer does not charge anything from the customer in this regard inasmuch as, the contract for rendition of service is with the appellant and not with customer concerned.
For rendition of aforesaid services, the dealers of appellant charges JCB India Limited. This service is subject to service tax and accordingly, the dealers admittedly pay service tax on the aforesaid services rendered to the appellant. This service tax so paid is in turn charged and recovered from the appellant and the appellant being entitled in law, takes Cenvat Credit thereof under Cenvat Credit Rules, 2004.
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