TaxTMI 
TaxTMI 
2024 (11) TMI 345
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....esultantly, vide Show Cause Notice No.665 dated 10.02.2016, the aforesaid amount of availed Cenvat credit is proposed to be reversed alongwith the interest and the appropriate penalties. The proposal was initially confirmed vide the Order-in-Original No.58/2022 dated 31.03.2022. Appeal against the said order has been dismissed vide the order under challenge/the order-in-appeal as mentioned above. Being aggrieved the appeal is before this Tribunal. 2. I have heard Mr. Ankit Totuka, ld. Counsel for the appellant and Mr. Rohit Issar, ld. Authorised Representative for the Revenue. 3. Ld. Counsel for the appellant has mentioned that the amount of Commission in the present case has been paid by the appellant to the agent as was appointed vide the agreement to this effect dated 05.06.2008. Ld. Counsel has mentioned that the commission paid to such agents is eligible for availment of Cenvat credit is an issue which is no more res-integra. The decision of this Tribunal in the case of Commissioner of CGST, Cus. & Central Excise, Alwar vs. Orient Refractories Ltd. reported in 2019 (26) G.S.T.L. 199 (Tri. - Del.) has been relied upon alongwith the decision Union of India vs. Kamlakshi Financ....
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.... adjudication in the present case is as to whether the activity assigned to the agent vide the agreement dated 05.06.2008 can fall under the definition of input service in rule 2(l) of CCR, 2004. Foremost the said definition is perused. The relevant para reads as follows:- [ (1) ["input service" means,- (i) services provided or agreed to be provided by a person located in non-taxable territory to a person located in non-taxable territory by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India where service tax is paid by the manufacturer or the provider of output service being importer of goods as the person liable for paying service tax for the said taxable services and the said imported goods are his inputs or capital goods; or (ii) any service used by a provider of output service for providing an output service; or (iii) any service used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal,] and includes services used in relation to modernisation, renovation or repairs of a factory, premises ....
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.... 5 of the Table) in respect of the question "Is the credit of Business Auxiliary Service (BAS) on account of sales commission now disallowed after the deletion of expression "activities related to business", clarified as under "The definition of input service 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 the same is linked to actual sale. Reading the provision harmoniously, it is clarified that credit is admissible on the services of sale of dutiable goods on commission basis." Thus according to this circular, the service of commission agents (Business Auxiliary Service) is covered by the term "advertisement or sales promotion." 6. The bare perusal makes it clear any activity which amounts to sales promotion i.e. the service by way of sale of dutiable goods on commission basis is eligible for availment of Cenvat credit. 7. Now the agreement between the service provider and the recipient/ the agent is perused. Clause 1 thereof recites as follows:- "The principal hereby appoints M/s. Joy Corporation as sale agent to represen....
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....(as was inserted vide Notification No. 2/2016, dated 3-2-2016) was considered. The said Circular was passed by the Department with a view to resolve the confusion prevalent due to the different views of the above said High Courts. 4. It was clarified therein that an explanation inserted in a Section/Rule is generally to explain the meaning and intendments of the said Section/Rule. Sometimes when the explanation is inserted to clarify a doubtful point of law it would be effectively retrospective in nature. While relying upon the said Circular, this Tribunal in Essar Steel India Ltd. case (supra) has held the commission paid to the agents is a sales promotion activity. Keeping in view the same and the fact that the matter is still sub-judiced before Hon'ble Apex Court due to the contrary decisions from two different High Courts but that the Department has subsequently tried to resolve the confusion. Order is hereby set aside. Appeal stands dismissed." 10. Tribunal Ahmedabad also in SR Steel India Ltd vs. CCE & ST, Surat reported in 2016 (335) ELT 660 has held as follows:- "20. But, the Hon'ble Gujarat High Court in the case of Cadila Healthcare Ltd. (supra) was unable to concur....