2017 (12) TMI 433 - AT - Central Excise

Tribunal allows appeals for Cenvat credit on sales commission, setting a precedent for retrospective credit claims.

The Tribunal allowed the appeals in favor of the appellants, setting aside the lower authority's decision disallowing Cenvat credit on sales commission as ... CENVAT credit - input service - sales commission - Held that: - reliance placed in the case of M/s Mangalam Cement Ltd. Vs. CCE, Udaipur [2017 (12) TMI 426 - CESTAT NEW DELHI], where it was held that CBEC vide Circular No.943/4/2011-CX. Dated 29/04/2011 has clarified that Cenvat credit is admissible on the services of the sale of the dutiable goods on commission basis - credit allowed - appeal allowed - decided in favor of appellant. Issues:- Dispute regarding Cenvat credit on sales commission- Interpretation of definition of 'input service' under Cenvat Credit Rules, 2004Analysis:The appellant, engaged in manufacturing ball and roller bearings, availed Cenvat credit on sales commission as an input service. However, the lower authority disallowed the credit, leading to the present appeal against the order-in-original dated 27/07/2015. The Tribunal considered a similar issue in the case of M/s Mangalam Cement Ltd. Vs. CCE, Udaipur, where it was clarified that Cenvat credit is admissible on commission paid for sale promotion activities. Referring to Circular No.943/4/2011-CX and Notification No.2/2016-CE (NT), the Tribunal held that the notification should be considered declaratory in nature and effective retrospectively. The Tribunal emphasized that the Explanation inserted in Rule 2(l) of the Cenvat Credit Rules, 2004 confirmed the Board Circular and resolved conflicting views of different High Courts. Consequently, the Tribunal found no merit in the impugned orders and allowed the appeals in favor of the appellants, setting aside the lower authority's decision.In conclusion, the Tribunal's decision clarified the admissibility of Cenvat credit on sales commission as an input service, aligning with the Circular and Notification issued by the Central Government. By interpreting the relevant provisions of the Cenvat Credit Rules, 2004 and considering previous judgments, the Tribunal established a clear precedent for allowing such credits retrospectively. This judgment provides guidance on the interpretation of the definition of 'input service' in the context of Cenvat credit claims, ensuring consistency and adherence to established legal principles.