TaxTMI 
TaxTMI 
TaxTMI 
2015 (8) TMI 21
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....13-TIOL-12-HC-AHM-ST], the credit availed by the appellant is not admissible. It was the case of the learned Advocate on behalf of the appellant that the facts of the present care are different than the facts before the High Court in the case of Cadila Healthcare Limited vs. CCE, Ahmedabad (supra). He made the Bench go through Para 13 and 17 of the contract entered between the appellant and its distributors which convey that in addition to selling products of the appellant such distributors were also undertaking the work of sales promotion of the appellant. 3. Shri G.P. Thomas (AR) appearing on behalf of the Revenue argued that in the entire contract there is no mention that out of consideration paid to the distributors any monetary consideration on account of sales promotion activities is also paid. Learned AR made the Bench go through Para 7 of one such contract entered between the appellant and M/s. Shree Shyam Industries to argue that entire consideration to the distributors/ consignment stockists is for selling the goods and is based on the value of the goods so delivered and sold. It was his case that this Clause-7 of the contract does not whisper anything about sales promot....
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.... from time to time supply to the Consignment Stockist such samples, display photographs, brochures and other printed sales promotion material and literature in respect of the products to the extent the Company may consider necessary. 17.0. Upon termination of appointment the Consignment Stockist shall promptly return to the Company or its nominee all the property of the Company such as all cops, records, books, diaries, samples and sales promotional materials of every type and description etc. in its possession or custody relating to the products and settle all outstanding dues from the customers and complete all other formalities for the recovery of dues, including the value of cops if any before claiming its Ser. charges and or refund deposit under this agreement." 6. It is observed from the above paragraphs of the contracts that basic agreement between the appellant and the distributors/ consignment stockists is for getting commission on the sales affected. Percentage of sales commission is also dependent on the turnout made by the distributors/ consignment stockists per month. Clause 13 and 17 of the contract also does not convey that distributors/ consignment stockists are r....
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....ition 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 agents. (ii)?The Tribunal has held that foreign commission agent service is in the nature of sales promotion and without any elaborate discussion in respect thereof has held that CENVAT credit was admissible on service tax paid in respect of such service. The Tribunal while reversing the findings recorded by the Adjudicating Authority has not given any reasons in support thereof and has merely placed reliance upon its findings in relation to the services rendered by the Clearing and Forwarding agents. (iii)?The learned counsel for the appellant placed reliance upon the findings recorded by the Adjudicating Authority to submit that the commission paid to foreign agent is being availed in the category of Business Auxiliary Service. However, this service is not used for manufacture of final product and is not used for clearance of final product from the place of removal. The commission agent is directly concerned with the sales and not with production, therefore, it is also not related to any ac....
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....ion.- 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 sale or purchase of goods, or provision or receipt of services, for a consideration, and includes any person who, while acting on behalf of another person (i)?deals with goods or services or documents of title to such goods or services; or (ii)?collects payment of sale price of such goods or services; or (iii)?guarantees for collection or payment for such goods; or (iv)?undertakes any activities relating to such sale or purchase of such goods or services; (vi)?As noted hereinabove, according to the assessee the services of a commission agent would fall within the ambit of sales promotion as envisaged in clause (i) of Section 65(19) of the Finance Act, 1994, whereas according to the appellant a commission agent is a person who is directly concerned with the sale or purchase of goods and is not connected with the sales promotion thereof. Under the circumstances, the question that arises for consideration is as to whether services rendered by a commission agent can be said fall within the ambit of expr....
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.... 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 to indicate that such commission agents were actually involved in any sales promotion activities as envisaged under the said expression. The term input service as defined in the rules means any service used by a provider of taxable service for providing an output service or used by the manufacturer whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal and includes services used in relation to various activities of the description provided therein including advertisement or sales promotion. Thus, the portion of the definition of input service insofar as the same is relevant for the present purpose refers to any service used by the manufacturer 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 ....
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....ollows the words such as is accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security. Thus, what is required to be examined is as to whether the service rendered by commission agents can be said to be an activity which is analogous to any of the said activities. The activity of commission agent, therefore, should bear some similarity to the illustrative activities. In the opinion of this court, none of the illustrative activities, viz., accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security is in any manner similar to the services rendered by commission agents nor are the same in any manner related to such services. Under the circumstances, though the 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....