Commr., CGST & Central Ex., Johpur Versus J.K. Lakshmi Cement Ltd.
Central Excise
2018 (10) TMI 754 – CESTAT NEW DELHI – TMI
CESTAT NEW DELHI – AT
Dated:- 11-9-2018
Excise Appeal No. E/51550/2018-CU [DB] with E/CO/50671/2018 – A/53041/2018-EX[DB]
Central Excise
MR. C.L. MAHAR, MEMBER (TECHNICAL) And MS. RACHNA GUPTA, MEMBER (JUDICIAL)
Present for the Appellant: Mr. K.K. Anand (Adv.)
Present for the Respondent: Mr. V.B. Jain, (DR).
ORDER
PER: RACHNA GUPTA
Present is Departmental appeal directed against order of Commissioner (Appeals) bearing no 247 dated 08.03.2018 vide which assessee is held eligible for cenvat credit of service tax paid to the service agent on sale commissions. the relevant facts for the adjudication of appeal are that assessee, M/s. J.K Lakshmi Cement Ltd. are engaged in manufacture of cement and are availing cenvat credit of central excise duty paid on inputs and capital goods. The department alleged is that the assessee has wrongly ava
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ification 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 application. The final order therefore has erred in applying this application with retrospective effect. It is also submitted that the sale commission can have not nexus with the manufacturing activity as such cannot be defined as the input services. Seen from that angle also, the commissioner appeals is alleged to have has committed mistake while allowing the cenvat credit Ld. DR has relied upon the decision of Hon'ble High Court of Gujarat in the case of Commissioner of Central Excise, Ahmadabad Vs. Cadila Healthcare Ltd. 2013 TIOL 12 (Ahmd. HC).
3. While rebutting these arguments it is submitted that the assessee is actually covered under Circular No. 943/4/2011-CX dated 29.04.2011 which entitles the assessee to avail cenvat credit upon the sales commission. The
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ction 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 value of which is included in the value of the final product and goods used for providing free warranty for final products; or
(iii) all goods used for generation of electricity or steam [or pumping of water] for captive use; or
(iv) all goods used for providing any [output service, or];
[(v) all capital goods which have a value upto ten thousand rupees per piece.]
but excludes……………………….
Explanation. – For the purpose of this clause, “free warranty” means a warranty provided by the manufacturer, the value of which is included in the price of the final product and is not charged separately from the customer;]
[(l) “input service” means any service, –
(i) used by a provider of [output service] for providing an output servic
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on 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 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 Tribunal Ahmadabad in Essar Steel India Ltd. (supra) has clarified that the explanation inserted in Rule 2 (1) (C) of the notification dated 03.02.2016 is declaratory in nature hence is effective retrospectively. It was clarified that the explanation so inserted is generally to explain the meaning of words contained in the circular and which was inserted to clarify a doubtful point of law. We also draw our support from the decision of Hon'ble Apex Court in the case of Brijmohan Das Lakshman Das Vs. Commiss
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