2023 (2) TMI 139

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....ds as per individual customer's requirement. The products are manufactured as per specific drawings, designs and technical specifications supplied by individual customers viz. Zonal Railways and Integral Coach Factories (ICF) etc.. The goods manufactured by the Appellant fall under Chapter 86 as well as Chapter 39 depending upon the usage as well as classification criteria. The procurement of purchase orders from the buyers is the pre-condition for manufacture of such tailor made goods. Show Cause Notice dated 31.03.2016 was issued alleging contravention of the provisions of Rule 3(i) read with Rule 2(l) of the CENVAT Credit Rules, 2004. It is the case of the Department that the assessee during the period from 01.04.2011 to 31.03.2015 irreg....

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....s, ICFs and other similar industries. He vehemently argued that the scope of the said commission agents is not just limited to the extent of procuring purchase orders, but also extends to liaison services, letter of credit services, resolution of any disagreements or disputes, expediting the interests of the Appellants and various other allied services in the interest of the Appellant. Against such services received from the commission agents, the Appellants pays commission charges to the said agents against issuance of invoices by the said agents, whereby the said agents also charge Service Tax at the applicable rate. The flow chart of manufacture operation in context of the agents, details of commission paid and bills of commission have a....

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....sion at serial no. 5. Relevant portion of the circular is as under: Sl.No.5 ISSUE: Is the credit of Business Auxiliary Service (BAS) on account of sales commission now disallowed after the deletion of expression "activities related to business"? CLARIFICATION : The definition of input services allows all credit on services used for clearance of final products upto the place of removal. Moreover activity of sale promotion is specifically allowed and on many occasions the remuneration for same is linked to actual sale. Reading the provisions harmoniously it is clarified that credit is admissible on the services of sale of dutiable goods on commission basis. 6.2. Department inserted an explanation to definition of....