TaxTMI 
TaxTMI 
TaxTMI 
2014 (1) TMI 1662
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....eriod could not have been invoked since the issue had already been raised earlier and show cause notice had been issued. In the second round of litigation for the same period, it has been held that since appellant did not provide the information called for and did not follow the decision already taken, extended period has been rightly invoked. Other than this in all other cases, the show cause notice has been issued within the normal period and therefore the demand is also for the normal period only. Penalties have been imposed in all the cases under Rule 15 of Cenvat Credit Rules, 2004. 2. The learned CA on behalf of the appellant submits that the service received by the appellant has been considered as sales commission only and since no sales promotion is involved and if there is no sales promotion activity by the commission agent, the service received is not covered by the definition of 'input service'. Hence Cenvat credit has been denied. 3. Inclusive part of the definition of 'input services', does not include commission as observed by the lower authorities and unless the commission agent undertakes the activity of sales promotion and he pays the service tax under ....
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.... promotions may form part of a wider sales campaign. Sales promotion has also been defined as stimulation of sales achieved through contests, demonstrations, discounts, exhibitions or trade shows, games, giveaways, point-of-sale displays and merchandising, special offers, and similar activities. The Advanced Law Lexicon by P. Ramanatha Aiyar, third edition, describes the term 'sales promotion' as use of incentives to get people to buy a product or a sales drive. In the case of Commissioner of Income Tax v. Mohd. Ishaque Gulam, 232 ITR 869, 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". Based on these observations he submits that in this case the lower authorities have recorded a finding that there was no sales promotion activity at all undertaken by the agents and therefore the decisions of the Hon'ble High Court of Gujarat and the Ahmedabad Bench of this Tribunal are applicable to the present case. Further the learned CA for the appellant relied upon the decision of the Hon'ble Hig....
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....re is nothing irregular about it." In the light of the aforesaid finding, learned counsel for the revenue was unable to justify that the claim of cenvat credit by the assessee was erroneous in any manner. No perversity or illegality could be shown by the learned counsel in the order passed by the Tribunal which may call for any interference by this court". In that case as can be seen from the above, Hon'ble High Court agreed and upheld the view taken by the Tribunal that canvassing and procuring order were in relation to sales promotion and would fall under sales promotion activity. Further the Hon'ble High Court also upheld the view taken that these activities cannot be considered as post-removal activity and have to be treated as pre-removal activities. At this juncture it has to be noted that one of the main grounds taken for rejecting the claim of the appellant for CENVAT credit is that the activity of the commission agents is post-removal and if the activity is post-removal, credit is not admissible. The learned CA submitted that the decision of the Hon'ble High Court of Punjab & Haryana clearly goes in favour of the appellant. He also submitted that in the case of Cadila He....
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....romotion. Learned counsel in his rejoinder relied upon the decision of the Hon'ble High Court of Punjab and Haryana in the case of Commissioner of Central Excise v. Ambika Overseas [2012 (25) S.T.R. 348 (P & H). He also submitted that in the case of Cadila Health Care Ltd. (supra), Hon'ble Gujarat High Court came to the conclusion that the benefit of CENVAT credit was not admissible in view of the fact that in that case there was no evidence whatsoever relied by the appellants. In fact in sub-para 8 of para 5.2, Hon'ble High Court observed "However there is nothing to indicate that such commission agents were actually involved in any sales promotion activities as envisaged under the said expression...". Therefore, it is his submission that the conclusion of Hon'ble High Court indicated that the commission agents in that case were only acting as simply commission agents there was no evidence to indicate that they were actually undertaking sales promotion activity. In the case of Ambika Overseas (supra) Hon'ble High Court upheld the observation of the Tribunal that canvassing and procuring orders were in relation to sales promotion and would fall under sales promotion activities. It ....