Hitachi Home And Life Solutions India Ltd. Vs C.C.E. & S.T. (CESTAT Ahmedabad)
The CESTAT, Ahmedabad bench has held that the cenvat credit cannot be denied on warranty services provided free of cost during the warranty period.
The appellants approached the Tribunal challenging the order of the department denying Cenvat Credit of services provided by them to their customers during warranty period through a third party on free of cost basis. The credit is in respect of maintenance and repair services provided by the authorized dealers/ franchises of the appellant, to the customers, for which there is no charge on the customers and for which the appellant are paying the authorized dealers/ franchises. The Authorized dealers/franchises paid service tax on the amount received from the appellant and the appellant have claimed Cenvat Credit of the said amount.
The Tribunal bench comprising Judicial Member, Mr. Ramesh Nair and Technical Member Mr. Raju found that it is not in dispute all these services are provided during the warranty period.
The Tribunal further relied on a similar issue wherein the Bombay High Court, in the case of Yeshbai vs. Ganpat Irappa Jangam, has held that 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.
Relying on the above decision, the Tribunal held that “The ratio of aforesaid decision is squarely applicable to instant case. Relying on the aforesaid decision, we find that the credit on warranty service provided free of cost during the warranty period through third parties cannot be denied.”
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
These appeals are filed by M/s Hitachi Home And Life Solutions India Ltd for denial of Cenvat Credit, demand of interest and imposition of penalty.
2. The issue involved in the instance case is if the appellants are entitled to avail Cenvat Credit of services provided by them to their customers during warranty period through a third party on free of cost basis. It is not in dispute that the credit is in respect of maintenance and repair services provided by the authorized dealers/ franchises of the appellant, to the customers, for which there is no charge on the customers and for which the appellant are paying the authorized dealers/ franchises. The Authorized dealers/franchises paid service tax on the amount received from the appellant and the appellant have claimed Cenvat Credit of the said amount. It is not in dispute all these services are provided during the warranty period. In appeal No. E/13887/2013 the period involved is April, 2006 to September, 2012 and in appeal no. E/10245/2020 period involved is April, 2013 and to March, 2016.
2.1 Learned Counsel for the appellant pointed out that the issue regarding admissibility of credit on maintenance and repair services provided during the warranty period for periods both prior to 01.04.2011 and after 01.04.2011 has been examined by the Tribunal in its order in the case of M/s Case New Holland Construction Equipment (I) Pvt Ltd- 2021 (8) TMI 963-CESTAT New Delhi. In view of the above Learned Counsel pointed out that the credit is clearly admissible and demand needs to be dropped. He also relied on the following decision.
