Excise – Cestat Ahmedabad: Free supply of pump during warranty period are covered under ‘activities relating to business’ and is a vital part of the business activity of the respondent, hence Cenvat credit allowed on the service of Repair & Maintenance – Revenue appeal dismissed [Order attached]
Order Date – 01 February 2023
Parties: C.C.E. & S.T.-Rajkot Vs Falcon Pumps Private Limited
- The Respondent, Falcon Pumps Private Limited, had taken cenvat credit on pumps sold by the respondent during the warranty period. The service during the warranty period is provided free of cost.
- The Revenue submits that 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.
- Whether the Respondent is entitled for cenvat credit in respect of after sale service provided during warranty period?
- The Tribunal held that 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) covers the ‘activities relating to business’ therefore, the said service during warranty period also clearly falls under the category of ‘activities relating to business’. This identical issue has been considered by this tribunal in the case of Leroy Somer India Pvt. Ltd.
- Hence the respondent are entitle for the cenvat credit on the service of Repair & Maintenance during warranty period and the appeal is dismissed.