2019 (7) TMI 490 - AT - Central Excise

Tribunal Allows Appeal for Cenvat Credit on Post-Manufacturing Activities

The Tribunal allowed the Appeal, setting aside the Order disallowing cenvat credit for post-manufacturing activities. Relying on precedent, the Tribunal ... CENVAT Credit - input service - commission agents for the sales activity of finished products - post manufacturing activities - HELD THAT:- Similar issue has come up for consideration before the coordinate bench of this Tribunal in the case of SIMBHAOLI SUGAR LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, MEERUT-II [2018 (4) TMI 1657 - CESTAT ALLAHABAD] where the Tribunal has allowed the Appeal considering the cenvat credit to be eligible as ‘input service credit’ in terms of Rule 2(l) of Cenvat Credit Rules. Credit allowed - appeal allowed - decided in favor of appellant. Issues:Appeal against Order disallowing cenvat credit under Cenvat Credit Rules, 2004 for post-manufacturing activities.Analysis:The Appellate Tribunal considered an Appeal against an Order disallowing cenvat credit amounting to Rs. 1,73,97,194 under the Cenvat Credit Rules, 2004, along with interest and penalties. The Order-in-Original confirmed the demand for the period from November 2008 to June 2013. The dispute arose as the appellants availed cenvat credit on service tax for commission agents involved in post-manufacturing activities, which was deemed ineligible. The Departmental audit invoked Rule 3(1) of the Cenvat Credit Rules, contending that only the provider of taxable services related to manufacturing could claim such credit.The appellant argued that a similar issue was considered by a coordinate bench of the Tribunal in a previous case, where the credit was allowed as 'input service credit' under Rule 2(l) of the Cenvat Credit Rules. The Department, represented by the Authorized Representative, maintained the findings of the impugned Order.After hearing both parties and reviewing the case record, the Tribunal referred to a previous judgment in the case of Simbhaoli Sugars Ltd., where it was held that appellants are entitled to cenvat credit on commission paid to selling agents for selling goods manufactured by the appellant. The Tribunal emphasized that conflicting judgments from different High Courts necessitated an independent decision, ultimately ruling in favor of the appellant and setting aside the impugned Order.In conclusion, the Tribunal allowed the Appeal, providing consequential benefits to the appellant based on the settled issue in their favor. The judgment highlighted the importance of independent interpretation in cases with conflicting legal precedents, ultimately ensuring the appellant's entitlement to cenvat credit on commission payments for sales activities.