TaxTMI 
TaxTMI 
2025 (11) TMI 1192
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....-03-18-19 dated 06.07.2018 passed by the Commissioner of Central GST & Central Excise, Kozhikode. 2. Respondent is a manufacturer of refractories bricks and high-quality materials and availed cenvat credit under Reverse Charge Mechanism (RCM) in respect of the various services received by them from the foreign service providers. The issue in the present appeal is regarding eligibility of cenvat credit on Sales Commission and General Services availed by the respondent where the service tax was paid on RCM basis. Alleging that such availment of cenvat credit is ineligible, proceedings were initiated and show-cause notice was issued on 31.05.2017. Thereafter, the adjudicating authority vide Order-in-Original dated 6.7.2018 dropped the deman....
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....judicating authority has rightly dropped the demand. As regarding the claim related to service tax paid on the RCM on sales commission, learned CA for the Respondent submits that the issue is no more res integra and settled as per the judgment of the Hon'ble High Court of the Kolkata in the matter of CCE, Kolkata-IV vs. Himadri Specialty Chemical Ltd.: 2022 (66) GSTL 264 (Cal.). Reliance was also placed on the following decisions: * Commissioner of Central Excise, Ludhiana vs. Ambika Overseas: 2012 (25) S.T.R. 348 (P & H) * Essar Steel India Ltd. vs. Commissioner of Central Excise & ST, Surat-II: 2016 (335) E.L.T 660 (Tri.Ahmd.) * Liebherr Machine Tools India (P) Ltd. vs. CCE, Cus. & S.T, Bangalore: 2016 (44) S.T.....
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....nst which credit was availed by the Respondent and only after considering the nexus between the input services and output services, held that these services are directly or indirectly associated with manufacturing of dutiable goods, hence, they qualify as input services only. Thus, there is no valid ground for disallowing the credit availed on such services where service tax was paid under RCM. Learned CA submits that thought the department has challenged the finding in the present appeal, there is no evidence advanced to reject these services. The learned CA further submits that this issue was considered by the Hon'ble High Court of Bombay in the case of Deepak Fertilizers & Petrochemicals Corpn. Ltd. vs. CCE, Belapur: 2013 (32) STR 532 (B....
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....ion "activities related to business"? 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. We also note that the Report of the Comptroller and Auditor General of India in March 2016 had clarified as follows: "4.1.3 Cenvat credit availed on sales commission As per rule 2(l) of Cenvat Credit Rules, 20024, sales promotion is an eligible credit, however sales commission is n....
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....)}." 7. Further, we find that the issue is no more res integra and settled as per the judgment of the Hon'ble High Court of the Kolkata in the matter of CCE, Kolkata-IV vs. Himadri Specialty Chemical Ltd. (supra) wherein it was observed that: "10. Mr. Bhattacharyya referred to the sample invoices and submitted that in the invoices, it has been stated under the column description "commission for sales". The correctness of such an identical submission made before the Tribunal was tested and after considering all the facts, the terms and conditions of the agreement and the nature of services rendered by the commission stockist the Tribunal recorded an independent finding that the activities of the commission stockist is towards sal....
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....ctice of assessment. Discussion & Decision : The conference discussed the issue in detail and the facts of both the cases where apparently conflicting judgments have been delivered. It was noted that the judgment of Hon'ble High Court of Gujarat was in a very specific set of circumstance where the sales commission agent seemed to be only trading in the goods i.e. buying and selling the goods without undertaking any sales promotion or advertising. In the said judgment, Hon'ble Court noted that "there is nothing to indicate that such commission agents were actually involved in any sales promotion activities as envisaged under the said expression. Obviously, commission paid to the various agents would not be covered in this e....