2022 (1) TMI 390

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...., in brief, are that the appellants are manufacturers of bulk drugs which they also export. To promote their export business, they hired agents to whom they pay commission. Since the commission was paid to an overseas agent, they paid service tax on the commission amounts under reverse charge mechanism. They have taken CENVAT credit of the service tax so paid treating it as an "input service". The case of the Revenue is that this cannot be called as an "input service" and no CENVAT credit is admissible of the service tax so paid. 3. Since there were conflicting judgments of various High Courts on the admissibility of CENVAT credit on the commission paid, a Notification No 2/2016-ST dated 03/02/2016 was issued inserting an explanation all....

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....n includes services by way of dutiable goods on commission bass." 22. An explanation inserted in a Section/Rule, is generally to explain the meaning of the words contained in the Section/Rules. The purpose of explanation is to explain the meaning and intendenments of the Section/Rule. Sometimes, the explanation may be inserted to clarify a doubtful point of law, which would be effectively retrospectively. In the present case, the expressions in the explanation as inserted by Notification No. 2/2016-C.E. (supra), make it clear that it is for explaining the meaning of clause "sales promotion" in the context of Rule 2(l) of the Rules, 2004. It is to provide an additional support to the dominant object of the word "sales promotion" in ....

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.... benefit, in the context of it to be given a retrospective operation. The same doctrine of fairness, to hold that a statute was retrospective in nature, was applied in Vjay V State of Maharashtra. It was held that where a law is enacted for the benefit of community as a whole, even in the absence of a provision the statute may be held to be retrospective in nature. However, we are (sic not) confronted with any such situation here. 24. In view of the foregoing, I find that the agents of situated in foreign countries facilitate the assesses by procuring orders for exporting the assessees products. The agent neither buy the products of the assesses nor sell them. The payment of commission by the assessees to their agents for sale of t....