Tribunal allows appeal on cenvat credit for commission agent services

The Tribunal allowed the appeal regarding the denial of cenvat credit on services of a commission agent for sales of products. It noted conflicting decisions by different High Courts on the admissibility of such credit but considered a CBEC Circular supporting the credit's allowance. The Tribunal held that the appellants had a bonafide belief in claiming the credit, and the extended period of limitation could not be invoked. However, the challenge regarding the denial of credit on membership fee for SSI on tours and travel services was not addressed due to procedural reasons.

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Issues:
- Denial of cenvat credit on services of commission agent
- Denial of credit on membership fee for SSI on tours and travel services
- Applicability of CBEC Circular no. 943/4/2011-CX dated 29.04.2011
- Issue of limitation in claiming credit

Denial of Cenvat Credit on Services of Commission Agent:
The appellants appealed against the denial of cenvat credit on services of a commission agent for sales of products. The appellant's counsel argued citing various legal precedents, including decisions from the Hon'ble High Courts of Gujarat and Punjab & Haryana, and a Tribunal decision. The counsel emphasized the retrospective effect of an added explanation to the Cenvat Credit Rules, which allowed the credit. The Tribunal noted conflicting decisions by different High Courts on the admissibility of such credit. The Tribunal also considered a CBEC Circular clarifying that credit on services of sale of dutiable goods on a commission basis is admissible. The Tribunal concluded that the appellants had a bonafide belief in claiming the credit, and the extended period of limitation could not be invoked.

Denial of Credit on Membership Fee for SSI on Tours and Travel Services:
The impugned order did not address the challenge regarding the demand for tours and travel services and membership fee of SSI exemption, as it was not raised in the grounds of appeal. Therefore, the Tribunal could not consider these issues at that stage.

Applicability of CBEC Circular no. 943/4/2011-CX dated 29.04.2011:
The Tribunal referred to the CBEC Circular, which clarified that credit on services of sale of dutiable goods on a commission basis is allowed. The Circular also indicated that even the revenue believed the credit was admissible, supporting the appellants' bonafide belief in claiming the credit. The Tribunal held that the extended period of limitation could not be invoked in the absence of evidence of malafides.

Issue of Limitation in Claiming Credit:
The show-cause notice was issued invoking the extended period of limitation for the period from 22.08.2005 to 09.04.2011. However, the Tribunal found that in the absence of malafides, the extended period of limitation could not be sustained. Consequently, the impugned order was set aside, and the appeal was allowed, emphasizing the appellants' bonafide belief in claiming the cenvat credit.

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