TaxTMI 
TaxTMI 
TaxTMI 
2014 (11) TMI 428
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....n agent who helps in procuring orders for sale of goods. Thus, according to the impugned order, service tax paid on the commission amount for the above two category of activities fall under the purview of input service in terms of Rule 2(l) of the CENVAT Credit Rules, 2004(CCR), and as such, the respondent is eligible for Cenvat credit of the service tax amount. The impugned order is the subject matter of present appeal before this Tribunal. 2. In the grounds of appeal annexed to the appeal memorandum, the revenue has stated the activities that the C & F agent perform on behalf of the respondent, which inter alia includes receiving of finished goods in their godowns, dispatch the same to dealers by raising invoices, collection and deposit of the amount in the banks, performing liaison work pertaining to sales tax and other matters of the respondent's company etc. According to the Revenue, the post sales services provided by the C & F agent to the respondent cannot be considered as 'input service', since the said services are not in relation either to manufacture or clearance of finished product from the place of removal . With regard to the services provided by both the agenci....
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....ion clause of input service in the CCR, but the meaning of the said expression has not been specified therein. As such, in terms of Rule 2(t) of the CCR, the definition assigned in the Central Excise Act, 1944 for the said expression has to be adopted for correct appreciation of the legislative intent behind the definition in the said rule. 7. Sub-section 3(c)(iii) of Section 4 of the said Act defines 'place of removal' to mean "a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory; from where such goods are removed." From the above definition read with the definition of ' input service' as contained in the CCR, it transpires that the services in relation to the activities of removing goods from factory, storing at the depot or C & F agent's premises and delivering the same to the customer are falling within the scope and ambit of the said definition clause. Therefore, under the facts and in the circumstances of the case, I am of the considered view that the activities of the C & F agent are confirming to the definition of 'input service', and as such, the....
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....e to be sold after their clearance from the factory; from where such goods are removed. (vi) Thus, the clearing and forwarding agent is an agent of the principal. The goods stored by him after clearance from the factory would therefore, be stored on behalf of the principal, and as such the place where such goods are stored by the C & F agent would fall within the purview of sub-clause (iii) of clause (c) of Section 4(3) of the Act and as such would be the place of removal. Viewed from that light the services rendered by the C & F agent of clearing the goods from the factory premises, storing the same and delivering the same to the customer would fall within the ambit of Rule 2(l) of the Rules as it stood prior to its amendment with effect from 1-4-2008, namely clearance of final products from the place of removal. . 9. With regard to the submission of the Revenue that the post sale activities such as liaison work pertaining to sales tax and other matters of the company cannot be considered as 'input services', it is difficult to concur with the view, because such activities are incidental and ancillary to the depot operations, w....
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.... The activity which constitutes 'sales promotion' in commercial parlance has been elaborately dealt with by the Hon'ble Gujarat High court in the case of Cadila Healthcare Ltd. (supra), relied on by the appellant. The relevant paragraphs 5.2(vii) to (ix) of the said judgment are reproduced as under :- (vii) The expression 'sales promotion' has been defined in the Oxford Dictionary of Business to mean an activity designed to boost the sales of a product or service. It may include an advertising campaign, increased PR activity, a free-sample campaign, offering free gifts or trading stamps, arranging demonstrations or exhibitions, setting up competitions with attractive prizes, temporary price reductions, door-to-door calling, telephone selling, personal letters etc. In the Oxford Dictionary of Business English, sales promotion has been defined as a group of activities that are intended to improve sales, sometimes including advertising, organizing competitions, providing free gifts and samples. These promotions may form part of a wider sales campaign. Sales promotion has also been defined as stimulation of sales achieved th....
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....rer directly or indirectly in relation to the manufacture of final products and clearance of final products from the place of removal. Obviously, commission paid to the various agents would not be covered in this expression since it cannot be stated to be a service used directly or indirectly in or in relation to the manufacture of final products or clearance of final products from the place of removal. The includes portion of the definition refers to advertisement or sales promotion. It was in this background that this court has examined whether the services of foreign agent availed by the assessee can be stated to services used as sales promotion. In the absence of any material on record, as noted above to indicate that such commission agents were involved in the activity of sales promotion as explained in the earlier portion of the judgement, in the opinion of this court, the claim of the assessee was rightly rejected by the Tribunal. Under the circumstances, the adjudicating authority was justified in holding that the commission agent is directly concerned with the sales rather than sales promotion and as such the services provided by such commission agent would not fall within....
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.... business activities mentioned in the definition are not exhaustive, the service rendered by the commission agents not being analogous to the activities mentioned in the definition, would not fall within the ambit of the expression activities relating to business. Consequently, CENVAT credit would not be admissible in respect of the commission paid to foreign agents. 12. The judgment of Hon'ble Bombay High Court in the case of Ultratech Cement Ltd. and Coca Cola India Pvt Ltd. cited by the respondent have no application to the facts of the present case, in as much as, the issue decided therein was not with regard to eligibility of Cenvat credit of service tax on commission paid to the agent for selling the goods. Whereas, the Hon'ble Gujarat High Court in the case of Cadila Healthcare Ltd. has specifically dealt with the role and functions of a commission agent and has also distinguished the services provided towards sales promotion from the services of mere selling the goods. Further, while interpreting the expression 'activities relating to business' used in the definition clause of 'input service', the Hon'ble Gujarat High Court in the above referred case has held that the ....