2007 (11) TMI 493 - AT - Central Excise

Summary

Issues:
Claim for deduction of sales promotion activity under "Input Services" definition.

Analysis:
The appellants claimed deduction for sales promotion activity as per the definition of "Input Services" under Rule 2(l) of Cenvat Credit Rules. The denial was based on the ground that the sales promotion commission was not obtained within the factory premises. The Chartered Accountant representing the appellant argued that the issue is settled as per the WZB Order of the Tribunal in a similar case. He contended that the Commissioner erred in requiring sales promotion activity to be conducted within the factory premises, which is impractical as sales inherently occur outside the factory. The commission received was directly linked to Input Services, supporting the appellant's strong case on merits.

The learned DR, representing the respondent, defended the original order denying the deduction for sales promotion activity under Input Services.

Upon prima facie examination, the Tribunal found the appellants eligible for the Input Services benefit related to the commission received for sales promotion. Consequently, the stay application was granted, waiving the pre-deposit requirement and staying the recovery until the appeal is disposed of. The Tribunal scheduled the appeal for further proceedings in due course.