2025-VIL-372-CESTAT-CHE-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Input Service Credit, AMC Services for traded goods rendered beyond the warranty period, Business Auxiliary Service, Club and Association Service - Appellant is a manufacturer of Portable Automatic Data Processing Machines and Data Processing Units and was availing CENVAT credit on various input services - Eligibility of Input Service Credit for Warranty and AMC Services - HELD - While the definition of "input service" under the CENVAT Credit Rules, 2004 is inclusive and not exhaustive, the services used must be integrally connected to the manufacturing activity - AMC may have a nexus to the sale of Office Machines (traded goods) but it is not integrally connected with the business of the manufacture of the appellants machines, up to the place of removal - Service Tax paid on AMC charges, does not represent tax paid on the input service in relation to its manufacturing unit as no such input service is availed by the manufacturing unit. Hence the cost of the input service does not form a part of the assessable value of the final product cleared from the manufacturing unit, to be eligible for the benefit of CENVAT Credit. Extending the credit of tax paid on a service, which is not a cost incurred by the manufacturing unit, and is rendered beyond the point of removal of the final product, would be contrary to the scheme of CENVAT Credit Rules - The AMC services for traded goods rendered beyond the warranty period do not have a direct nexus with the manufacturing activity of the appellant's unit – Further, the appellant failed to segregate the tax credits for warranty services (eligible) and AMC services (ineligible) and the burden of proving the eligibility of the input service credit is on the assessee - the Original Authority is correct in denying credit on Warranty and AMC services for want of identification of the amounts pertaining to warranty and AMC separately - An input credit does not become eligible because it meets the academic definition as per law. It becomes eligible when the facts and procedure adopted for availment of credit satisfy the requirements of law - The disallowance of input service credit for the AMC services is upheld and the confirmation of demand relating to AMC and warranty charges [Management, Maintenance or Repair Services] with respect to the manufacture unit is sustained - Eligibility of Input Service Credit for Business Auxiliary Service - HELD – The demand pertaining to Business Auxiliary Service was dropped for the subsequent period and the Department did not appeal against that order. Therefore, the issue was settled in favor of the appellant - Eligibility of Input Service Credit for Import of Services and Blanks - HELD - The services received from the appellant's dealers situated outside India in the form of market research data and consultancy services are covered under the inclusive part of the definition of "input service" and are eligible for input service credit - Eligibility of Input Service Credit for Club and Association Service - HELD – The issue of availment of CENVAT credit on service tax paid for corporate membership with various chambers and associations has been decided in favor of the assessee in other cases. The Tribunal allowed the input service credit for club and association services - Invocation of Extended Time Limit - HELD - The Tribunal observed that there was no deliberate attempt to evade duty, and the services, except for the issue of AMC, were finally decided in favor of the appellant. The Tribunal set aside the demand for the extended period.
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