Retrospective amendment to refund notification required fresh review of CENVAT credit claims for foreign agent commission.

Retrospective amendment to the refund notification required reconsideration of CENVAT credit claims for service tax paid on commission to a foreign agent used for sales promotion. The refund had been denied on the view that the input services were not used in the manufacture of exported goods, but the amended notification extended coverage to services used in or in relation to manufacture and was stated to apply retrospectively. The matter was remanded to the original adjudicating authority to decide the refund claims afresh under the amended legal position.

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Issues: Whether refund of CENVAT credit of service tax paid on commission to a foreign agent for sales promotion activities was to be reconsidered in light of the retrospective amendment to the relevant notification.

Analysis: The refund had been denied on the premise that the input services were not used in the manufacture of the exported finished goods. However, the applicable notification had been amended to extend the expression to services used in or in relation to manufacture, and the amendment was stated to operate retrospectively from the effective date relevant to the claims. In view of this retrospective change, the refund claims required fresh consideration on the basis of the law as it stood after the amendment.

Conclusion: The matter was remanded to the original adjudicating authority to reconsider the refund claims afresh in light of the retrospective amendment.

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