Judge waives pre-deposit for Cenvat credit demand. Appellant successful in challenging disallowed credit. Recovery stayed.

The judge ruled in favor of the appellant, waiving the requirement of pre-deposit for the Cenvat credit demand, interest, and penalty, and stayed the recovery. The appellant's challenge against the disallowance of Cenvat credit on commission agent's service for procuring sales orders was successful based on previous Tribunal judgments and a Board's Circular supporting the eligibility of such services for Cenvat credit.

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Issues:
Admissibility of Cenvat credit on service tax paid for commission agent's service for procuring sales orders.

Analysis:
The appellant, a manufacturer of Asbestos Cement Pipes and Asbestos Cement Couplings, challenged the disallowance of Cenvat credit of service tax paid on commission agent's service for procuring sales orders. The Jurisdictional Assistant Commissioner disallowed the credit, demanded interest, and imposed a penalty. The Commissioner (Appeals) upheld the disallowance of Cenvat credit on commission agent's service but allowed credit for other services. The appellant appealed this decision along with a stay application.

During the hearing, the appellant's counsel argued that the issue had been decided in their favor in previous cases, citing judgments like Birla Corporation Ltd. vs. CCE, Lucknow. The appellant contended that commission agent's service for procuring sales orders falls under the definition of input service. The respondent opposed the stay application, asserting that this service is a post-manufacturing activity and not eligible for waiver from pre-deposit.

The appellant referred to a Board's Circular clarifying that services for sales promotion, including sales on commission basis, are eligible for Cenvat credit. The Circular highlighted that even when 'activities related to business' were part of the definition of 'input service,' commission agent's service for procuring sales orders would be covered. The appellant argued that the Commissioner (Appeals) decision contradicted this Circular.

After reviewing the submissions and records, the judge noted that previous Tribunal judgments and the Board's Circular supported the appellant's position. The judge found no contradiction between the Circular and the law, making it binding on the Departmental officers. Consequently, the judge ruled in favor of the appellant, waiving the requirement of pre-deposit for the Cenvat credit demand, interest, and penalty, and stayed the recovery. The stay application was allowed.

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