2018 (2) TMI 702 - AT - Central Excise

Tribunal upholds decision on Cenvat credit for Sugar Sales Commission, rejecting Revenue's arguments

Principal Commissioner of Customs, Central Excise & Service Tax, Meerut Versus M/s SBEC Sugar Mill Ltd.,

The Tribunal upheld the decision of the Ld. Commissioner (Appeals) regarding the admissibility of Cenvat credit on Sugar Sales Commission, allowing the ... CENVATcredit - input - Sugar Sales Commission - It appeared to Revenue that Sugar Sale is not input and service and therefore, said Cenvat credit was not admissible - Held that: - Since the issue is no more res-integra, following decision of this Tribunal in the above stated case of Birla Corporation Ltd. [2014 (6) TMI 385 - CESTAT NEW DELHI], where it was held that commission agents service would be cenvatable as the term ‘advertisement and sale promotion’ was there in the definition of input service even during period prior to 1.4.2011 - appeal dismissed - decided against Revenue. Issues:1. Admissibility of Cenvat credit on Sugar Sales Commission.2. Interpretation of the definition of 'Business Auxiliary Service'.3. Applicability of precedent judgments on Cenvat credit eligibility.Analysis:Issue 1: The appeal concerns the admissibility of Cenvat credit on Sugar Sales Commission by the respondent, who is engaged in the manufacture of Sugar & Molasses. The Revenue contended that Sugar Sale is not an input or service, challenging the admissibility of the claimed credit amounting to Rs. 20,50,823. The proceedings initiated through a Show Cause Notice led to the confirmation of the demand by the Order-in-Original dated 27/01/2016, prompting the respondent to appeal before the Commissioner (Appeals) who subsequently allowed the credit.Issue 2: The main ground raised by the Revenue was based on a ruling by the Hon'ble High Court of Gujarat in the case of Commissioner of Central Excise, Ahmedabad-II v. Cadila Healthcare Ltd., which held that Sales Commission is not admissible as Cenvat credit. However, the Ld. Commissioner (Appeals) considered this argument and referenced a decision by CESTAT, Delhi in the case of Birla Corporation Ltd. v. Commissioner of Central Excise, Lucknow, which distinguished the Gujarat High Court's ruling and relied on the findings of the Hon'ble Punjab & Haryana High Court in the case of Commissioner of Central Excise v. Ambika Overseas to assert that services of Sale Commission Agents are indeed Cenvatable Services.Issue 3: After considering the rival contentions and the precedents cited, the Tribunal, led by Mr. Anil G. Shakkarwar, Member (Technical), upheld the Ld. Commissioner (Appeals)'s decision, deeming the Order-in-Appeal as sustainable. The Tribunal relied on the decision in the case of Birla Corporation Ltd. to reject the Revenue's appeal, thereby affirming the admissibility of the Cenvat credit claimed by the respondent. The judgment concludes by stating that the respondent is entitled to consequential relief as per the law.