2018 (10) TMI 754 – CESTAT NEW DELHI – TMI – CENVAT Credit – input services – service tax paid to the service agent on sale commissions – period from April 2015 to November 2015 – Held that:- From the definition of input services, it becomes clear that the activity of sales promotion is specifically included in the definition of input services – similar view adopted in the case of CCE Ludhiana Vs. Ambika Overseas [2011 (7) TMI 980 – PUNJAB & HARYANA HIGH COURT].
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As per Circular No. 943/4/2011-CX dated 29.04.2011, also the cenvat credit of service tax paid on amount of commission paid to the commission agent is available to the assessee – Though the Commissioner (Appeals) vide order under challenge, has extended a retrospective benefit of notification no. 2/2016 dated 03.02.2016 but we are of the opinion that the said notification is nothing but the clarification of the said circular.
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Appeal dismissed – decided against Revenue. – Excise Appeal No. E/51550/2018-CU [DB] with
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7; 12,96,9,860/- due to contravention of provisions of Rule 2 read with Rule 3 with Cenvat Credit Rules, 2004 (CCR, 2004 in short) was proposed. The said show cause notice was initially adjudicated vide order no. 359 dated 12.01.2017 vide which the proposed demand was confirmed alongwith the appropriate interest and the proportionate penalties. Being aggrieved an appeal was filed before Commissioner (Appeals) which was allowed. Resultantly the department has moved the present appeal. 2. Ld. DR while impressing upon the grounds of appeal has mentioned that the Commissioner Appeals has extended the benefit of Notification 2/2016-CE dated 03.02.2016 but the said notification has wrongly been given a retrospective effect because the impugned period is prior the notification i.e. April 2015 to November 2015. It is impressed upon that the explanation in Rule 2(1)(C) CCR, 2004 shall be effective only from the date of publication in the official gadget i.e. It shall only be prospective applica
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dia Ltd. Vs. Commissioner of Central Excise Surat 2016 (335) ELT 660 has prayed for the order under challenge to be confirmed and appeal to be dismissed. 4. After hearing both the parties and perusing the entire record we are of the opinion as follows: It is an admitted fact that the appellant have been paying commission to foreign/ domestic agents. They have utilized the cenvat credit of service tax paid there upon. Department has denied the said utilization and a recovery thereof proposed vide the impugned show cause notice was confirmed by Order-in-Original on the ground that the sale commission is not an input service. Since the said decision has been reversed, for the adjudication of the impugned controversy definition of input service is relevant. Section 2k of CCR, 2004 reads as follows: Input means [(k) input means – (i) all goods used in the factory by the manufacturer of the final product; or (ii) any goods including accessories, cleared along with the final product, the valu
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ation to modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, security, business exhibition, legal services, inward transportation of inputs or capital goods and outward transportation upto the place of removal; but excludes services……………………. From the above definition it becomes clear that the activity of sales promotion is specifically included in the definition of input services we also draw our support from the decision of the case CCE Ludhiana Vs. Ambika Overseas 2012 (25) STR 348 (P & H). 5. As per circular dated 29.04.2011 also the cenvat credit of service tax paid on amount of commission
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