Page 95 - GSTL_11th June 2020_Vol 37_Part 2

2020 ] LUCAS TVS LTD. v. COMMISSIONER OF GST & CENTRAL EXCISE, CHENNAI 181
not eligible for credit. He explained that the appellant has included the value of
warranty claims in the assessable value and discharged excise duty on the same.
Further, there is no restriction that the input services in the nature of Repair and
Maintenance Services has to be provided inside the factory of the appellant. He
relied upon the decision of the Tribunal in the case of M/s. Elgi Equipments Ltd. v.
Commissioner of Central Excise, Coimbatore reported in 2017 (51) S.T.R. 457 (Tri. -
Chennai) to support his contentions.
3. The Learned Authorised Representative for Revenue, Ms. T. Ush-
adevi, DC (AR) reiterated the findings in the impugned order. She submitted that
the Warranty Services have been provided outside the place of removal. For the-
se reasons, the credit has been rightly denied by the authorities below. She sub-
mitted that the said services do not qualify as ‘input services’ as per the defini-
tion and, therefore, is not eligible for credit. It is also pointed out by her that as
per exclusions in 2(l)(BA), the Maintenance and Repair Services insofar as they
relate to motor vehicles, which are not capital goods is excluded.
4. Heard both sides.
5. The issue is with regard to denial of credit of input services on war-
ranty claims. The appellant is a manufacturer of motor vehicle parts and accesso-
ries. They supplied parts and accessories to original manufacturers of vehicles
M/s. Maruti Udyog Ltd., M/s. Tata Motors, etc. The vehicle manufacturers have
an obligation to fulfil the warranty claims of the vehicles sold by them. Whenev-
er a customer puts forward claim during the warranty period, the deal-
ers/manufacturers fulfils such claim and does the repair and maintenance and
servicing of the vehicles. The parts, which are required to be replaced, are pro-
cured from the appellant herein, who, has to provide the same to the vehicle
manufacturers. Thus, there is an obligation on the part of the appellant to fulfil
such supply during the warranty period. The service provider, who has done the
maintenance and repair during the warranty claims, have paid Service Tax on
such Repair and Maintenance Services. The appellant, who has fulfilled the obli-
gation during the warranty claim on which invoices has been raised has availed
the credit of the Service Tax paid on such repair and maintenance done during
the warranty period.
6. In the show cause notice, the sole allegation is that credit is ineligible
since the input services do not have nexus with the manufacturing activity. Such
an allegation is factually wrong since the supply of parts and components during
the warranty claim definitely relates and has nexus with to the manufacturing
activity of the appellant. At the time of adjudication, the original authority has
given a go by to this allegation raised in show cause notice and has rejected the
credit raising a new allegation stating that the credit is not eligible as the input
services have been availed outside the place of removal. The authorities below
have relied upon the decision of Hon’ble Apex Court in the case of Commissioner
of Central Excise & Service Tax v. M/s. Ultratech Cement Ltd., reported in 2018 (9)
G.S.T.L. 337 (S.C.) to observe the input services have been availed beyond the
place of removal and, therefore, not eligible for credit. I do not think that the said
decision is applicable to the facts of this case. The input services in the nature of
repair and maintenance are in connection with supply of parts during the war-
ranty period. These are not services which are connected with outward transpor-
tation of goods. All input services listed in the definition under Rule 2(l) of Cen-
vat Credit Rules are not restricted to be availed within the factory itself. It is not
necessary that all input services should be availed within the factory itself. The
GST LAW TIMES  11th June 2020  95