TaxTMI 
TaxTMI 
2023 (5) TMI 297
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.... 1 Sales Incentives paid is in the nature of Sales commission and not eligible for Credit (Refer Para 13.2 of the impugned order) 1,11,99,110 - 1,11,99,110 2 Credit denied on the ground that they are not having nexus with output (Refer Para 12.8 of impugned order) - - - i. Consulting Engineer 62,595 - 62,595 ii. Telecommunication 2,155 - 2,155 iii. Stockbroker 5,324 - 5,324 iv. Company Secretary/Chartered Accountant Services 1,041 - 1,041 v. Insurance Services 1,039 - 1,039 vi. Courier 308 - 308 3 Credit denied for not adducing evidence (Refer Para 14.1 of impugned order) - - - a. Annual Maintenance of Xerox machines 74,200 - 74,200 b. Car rentals 514 - 514 c. Rentin....
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....olding that the activity amounted to pure sales commission and is not amounting to sales promotion, he relied upon the case law of CCE Ahmedabad-II vs Cadila Healthcare Ltd [2013 (30) STR 3 (Guj)] and confirmed the demand. The learned Consultant submits that as a matter of fact, this case law supports the Appellant as they have only received the sales promotion service from Veljan. (ii) As an alternate pleading, he submits that even if it is taken for a moment, though not admitting that the Adjudicating Authority is correct in classifying the service as that of 'sales commission service', still they would be eligible for the Cenvat Credit. For this he relies on the CBIC Circular No. 943/4/2011-CX dt.29.04.2011 and Notification No. 02/2016 dt.03.02.2016 wherein Explanation was added to the definition of BAS reading as under: "Explanation - For the purpose of this clause, sales promotion includes services by way of sale of dutiable goods on commission basis" 3. He also relies on the case law of Essar Steel India Ltd vs CCE & ST, Surat [2016 (335) ELT 660 (Tri-Ahm)] wherein the Tribunal has held that the explanation added on 03.02.2016 is retrospective in na....
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....duced below: "Whereas the 'Manufacturer' desired that the products manufactured by them are to be sold in large scale abroad for which it is desired to sell its products as 'indirect exports' through the 'Buyer' against the orders procured from the customers abroad and such 'indirect export' transactions have started from March, 2000 and the 'Manufacturer' has been paying to the 'Buyer' an incentive upto 10% from the total sales effected in a financial year of the 'Manufacturer' by way of 'indirect export' as agreed between the parties and recorded in the Board Meeting of the 'Manufacturer' company held on 28th January, 2002. Now it is further agreed upon that the 'Manufacturer' and 'Buyer' to include the following stipulations and conditions in respect of the orders placed for the purpose of export of the products manufactured by the 'Manufacturer'. 1. That the 'Manufacturer' shall manufacture the required products by the 'Buyer' as per the specification mentioned in the purchase order placed from time to time. 2. .. 3. .. 4. ..That the payment will be made within 90 days from date of physical removal of goods from 'Manufacturers' facto....
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....Appellant. 12. The subsequent clarification given under Circular No. 943/4/2011-CX dt.29.04.2011 and addition of Explanation to the definition of BAS vide Notification No. 02/2016 dt.03.02.2016 shows the legislative intent that the assessee should not be deprived of the Cenvat Credit even when mere sales commission is paid where sales promotion may not be involved. The amended notification, in effect means that the Cenvat Credit would be eligible not only for the sales promotion services per se but also for commission paid on pure sales. 13. The Tribunal in the case of Essar Steel India Ltd vs CCE & ST, Surat (cited supra) has gone into the issue as to whether such amendment will have retrospective effect or not and held as under: "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 restrospectively. In the present case, the expressions in the explanation as inserted by Notification No.....
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.... cited case laws are squarely applicable to the facts of the present case. Accordingly, we allow the Appeal in respect of the confirmed demand of Rs.1,11,99,110/- towards the Cenvat Credit taken on sales incentive paid by the Appellant. 16. In respect of CENVAT credit denied on account of credit taken for various services like consulting engineer, stock broker, etc., the factual details are required to be verified by the Adjudicating Authority to come to a conclusion as to whether the Appellant is eligible for CENVAT credit or not. This exercise cannot be taken up at the Tribunal level. Accordingly, we are remanding the matter to the Adjudicating Authority, in respect of the following confirmed demands: Sl. No Reason of Denial Disputed Amount (Rs.) 1 Credit denied on the ground that they are not having nexus with output (Refer Para 12.8 of impugned order) - i Consulting Engineer 62,595 ii Telecommunication 2,155 iii Stockbroker 5,324 iv Company Secretary/Chartered Accountant Servic....