2019 (1) TMI 971

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....on to be a input service SCN No. 1565 dated 01.11.2016 was issued proposing the recovery of the said amount alongwith the interest at the appropriate rate and the proportionate penalties. The said proposal was confirmed vide Order-in-Original No. 02 dated 12.04.2017. An Appeal against thereof was preferred before Commissioner(Appeals) who vide Order-in-Appeal No. 446 dated 15.05.2018 has set aside the Order of original adjudicating authority thereby allowing the Appeal. The Department being aggrieved is before this Tribunal. 2. It is impressed upon by the Department that C.C.E., Ahmedabad Vs. Cadila Health Care Ltd. 2013 (30) S.T.R. 3 was rightly been relied upon by the original adjudicating authority it being a later decision of the High ....

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....tained. 4. After hearing both the parties, it is foremost important to look into Rule 2(l) of CCR 2004 which reads as follows: "(l) "input service" means any service- (i) Used by a provider of output service for providing an output service; or (ii) Used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and cleance of final products upto the place of removal and includes services used in relation to modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, accounting, auditing, financing, r....

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....preceding removal of the goods by the manufactures. Without the firm order, the respondents were not expected to remove the goods to a foreign destination. Therefore, the submission of the Ld. DR that these activities are post removal activities cannot be accepted. Further, the definition of the 'input services' includes services used in relation to 'sales promotion' and these activities can rightly be described as sales promotion activities. Sales promotion activities undertaken at given point of time also aims at sales of goods which are to be manufactured and cleared on future. Any advertisement given as a long term impact cannot be treated as post clearance activities and therefore sales promotion has been specifically included in the d....

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.... of sales promotion by inserting: "20. But, the Hon'ble Gujarat High Court in the case of Cadila Health Care Ltd. (supra) was unable to concur with the contrary view taken by the Hon'ble Punjab & Haryana High Court in the case of Commissioner of Central Excise, Ludhiana Vs. Ambika Overseas (supra). The Hon'ble Gujarat High Court held that this issue is concerned, the question is answered in favour of the Revenue and against the assessee. In this background legislature explained the meaning of the sales promotion by inserting Explanation in Rule 2(l) of Rules, 2004 and declared that sales promotion includes services by way of sale of dutiable goods on commission basis. IN other way, Explanation to Rule 2(l) of Rules says in clear terms that....