TaxTMI 
TaxTMI 
2013 (8) TMI 232
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....dit of Service Tax paid on the commission agent services. Applicant also submitted that the Hon'ble High Court of Punjab & Haryana in the case of Ambika Overseas 2012 (25) STR 348 (P&H), dismissed the appeal filed by the Revenue in the case Tribunal allowed credit of Service Tax paid on commission agents services. In these circumstances, the demand confirmed by invoking extended period of limitation on the ground suppression with intent to evade payment of duty is not sustainable. The contention is that the approximately Rs.1,50,00,000 demand is beyond the normal period of limiatation. 4. In respect of the demand within the normal period of limitation, the contention is that there are divergent views of 2 Hon'ble High Courts and therefore, it is a fit case for waiver of dues. The applicant also submitted that the Hon'ble High Court of Gujarat in the case of Cadila Healthcare Ltd. (supra) has not taken into consideration the main part of the definition as provided under Rule 2 (l) of the CENVAT Credit Rules. The applicant relied upon the decision of Hon'ble Supreme Court in the case of Coromandel Fertilizers 1984 (17) ELT 607 (SC). The contention is that the Hon'ble Supreme Court....
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....y service in relation to (i) promotion or marketing or sale of goods produced or provided by or belonging to the client or (ii) promotion or marketing of service provided on behalf of the client and includes services as a commission agent. (i) The Adjudicating Authority held that on a perusal of the definition of commission agent as defined under clause (a) to the Explanation under Section 65(19) of the Act, a commission agent is a person who acts on behalf of another person and causes sale or purchase of goods. In other words, he is directly responsible for selling or purchasing on behalf of another person and that such activity cannot be considered as sales promotion. According to the Adjudicating Authority there is a clear distinction between sales promotion and sale. A commission agent is directly concerned with sales rather than sales promotion. He, accordingly, held that service provided by commission agent does not fall within the purview of the main or inclusive part of the definition of input service as laid down in Rule 2(l) of the Rules and, therefore, the assessee was not eligible for CENVAT credit in respect of the service tax paid on commission paid to foreign agen....
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....ncludes portion of the definition. It was also submitted that the service tax paid to a commission agent for sale of final product would fall within the ambit of sales promotion which is a business auxiliary service and would, therefore, also fall within the purview of input service. (v) In the backdrop of aforesaid facts and contentions, reference may be made to the definition of business auxiliary service as defined under Section 65(19) of the Finance Act, 1994, which to the extent the same is relevant for the present purpose reads thus : Business Auxiliary Service means any service in relation to, (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or promotion or marketing of service provided on behalf of the client; or and includes services as a commission agent but does not include any information technology service and any activity that amounts to manufacture within the meaning of clause (f) of Section 2 of Central Excise Act, 1944 Explanation.- For the removal of doubts, it is hereby declared that for the purposes of this clause, (a) Commission Agent means any person who acts on behalf of another person and causes s....
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....69, a Division Bench of the Madhya Pradesh High Court drew a distinction between the expenditure made for sales promotion and commission paid to agents. It was held that commission paid to the agents cannot be termed as expenditure on sales promotion. From the definition of sales promotion, it is apparent (viii) that in case of sales promotion a large population of consumers is targeted. Such activities relate to promotion of sales in general to the consumers at large and are more in the nature of the activities referred to in the preceding paragraph. Commission agent has been defined under the explanation to business auxiliary service and insofar as the same is relevant for the present purpose means any person who acts on behalf of another person and causes sale or purchase of goods, or provision or receipt of services, for a consideration. Thus, the commission agent merely acts as an agent of the principal for sale of goods and such sales are directly made by the commission agent to the consumer. In the present case, it is the case of the assessee that service tax had been paid on commission paid to the commission agent for sale of final product. However, there is nothing t....
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....ruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security. The words activities relating to business are followed by the words such as. Therefore, the words such as must be given some meaning. In Royal Hatcheries (P) Ltd. v. State of A.P., 1994 Supp (1) SCC 429, the Supreme Court held that the words such as indicate that what are mentioned thereafter are only illustrative and not exhaustive. Thus, the activities that follow the words such as are illustrative of the activities relating to business which are included in the definition of input service and are not exhaustive. Therefore, activities relating to business could also be other than the activities mentioned in the sub-rule. However, that does not mean that every activity related to the business of the assessee would fall within the inclusive part of the definition. For an activity related to the business, it has to be an activity which is analogous to the activities mentioned after the words such as. What follows the words such as is accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share reg....