GUJARAT FORGING LTD. Vs. CCE

JUDGEMENT

(1.) THIS appeal is directed against Order -in -Appeal No. 748/2012/ Commr. (A)/RBT/RAJ dt. 23.08.2012.

(2.) THE relevant facts that arise for consideration are that during the course of audit, it was noticed that the Appellant herein had taken the credit of Service Tax of Rs.27,61,791/ - paid on bills/ invoices issued by M/s Jayshree Enterprise, Rajkot who were providing Maintenance and Repairing Services of Diesel Engines cleared by the Appellant within one year warranty period. During the warranty period M/s Jayshree was attending complaints regarding maintenance and repairing of Diesel Engine on behalf of the Appellant and was charging service charge in this regard from the Appellant for the services. The lower authorities took a view that such repair & maintenance of engines during warranty period would not fall under the category of input service as the scope of the credit is restricted to the services used at factory premises and not beyond that point. Resultantly the Appellant for the impugned period i.e. Jan ' 2008 to March ' 2011 were issued three show cause notices dt.18.10.2010, 29.04.2011 and 18.07.2011 proposing to disallow credit and imposition of penalty. In show cause notice dt. 18.10.2010 penalty was proposed to be imposed under Rule 15(1) of Cenvat Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944 whereas in the subsequent show cause notices the penalty was proposed to be imposed under Rule 15(1) of Cenvat Credit Rules, 2004.

(3.) THE counsel for the Appellant makes submission that the findings of the adjudicating authority as well as Commissioner (Appeals) are beyond the terms of the show cause notice. That the show cause notice alleged that the services in question are not input service, whereas the lower authorities denied the credit on the ground that no evidence has been produced that the warranty charges are part of value of the goods and that the warranty charges pertained to the goods under one year warranty. He submits that since the orders passed by the lower authority are beyond the scope of the show cause notice, hence the same is required to be set aside. The Ld. Counsel relies upon following judgments :