2015 (7) TMI 1165

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....oods. 2. The facts of the case are that, during the course of internal audit (EA 2000), it appeared that the Appellants had availed cenvat credit on service tax paid on Sales Commission/Dalali (Brokerage). The Appellants also availed cenvat credit of service tax paid on Sales Commission to various parties for selling/marketing of their finished goods. It further appeared that the Appellants were not entitled to avail service tax credit of the above said service since the said service was not defined as input service under the provisions of sub Rule (1) of Rule 2 of the Cenvat Credit Rules, 2004 read with Section 37(2) of Central Excise Act, 1944. The relevant extract of definition of the input service is reproduced below : ' Input servi....

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...., it appeared the Appellants had wrongly availed service tax credit of Rs. 8,20,847/- from August, 2006 to November 2010 which was required to be recovered from them under the provisions of Rule 14 of the Cenvat credit Rules, 2004. 3. A Show Cause Notice dated 8.2.2011 was issued in this regard. The matter was adjudicated vide OIO dated 23.12.2011 confirming the demand of cenvat credit of service tax of Rs. 8,20,847 under Rule 14 of the Cenvat Credit Rules, 2004. 3.1 Interest and equivalent penalty were also imposed by the Adjudicating Authority. The OIO was upheld by the Commissioner (Appeals) vide their impugned order. The assessee is in appeal before us against the said order. 4. Heard both the sides. The matter is no more res integra....

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....sed by the appellant in grounds of appeal, as to that during the relevant period, there were decisions which indicated that service tax paid on the commission to the commission agents is eligible for availment of Cenvat credit and accordingly appellant availed the Cenvat credit. It is also undisputed that the appellant is a manufacturer and was filing regular monthly ARE-1 returns to the authorities and indicating therein availment of such Cenvat credit. In my considered view, the action of the appellant in taking the Cenvat credit of the service tax to the commission agents could be out of bona fide belief as to eligibility to Cenvat credit as it is in relation to the business of manufacturing and selling. I find that the said bona fide be....