2011 (10) TMI 324 - AT - Service Tax

Admissibility of Service tax as Cenvat credit - Payments made to commission agent under Business auxiliary service - Revenue argued credit is admissible only when the service is rendered in or in relation to manufacture Held That - Board itself clarified in Circular No.943/4/2011-CX dt.29.4.2011CCE credit is admissible. Nagpur Vs. Ultratech Cement (2010 -TMI - 78203 - BOMBAY HIGH COURT) & CCE Mumbai Vs. GTC Ltd larger bench (2008 -TMI - 31592 - CESTAT MUMBAI) input service should be treated as one similar to input credit is admissible.

Summary

Issues:
1. Admissibility of service tax paid by Commission Agent as CENVAT credit under Business Auxiliary Service.

Analysis:
The judgment pertains to an appeal by the Revenue against a decision by the ld. Commissioner (Appeals) regarding the admissibility of service tax paid by a Commission Agent as CENVAT credit to the respondent under the category of Business Auxiliary Service. The ld.AR for the Revenue argued that the credit is only admissible when the service is rendered in or in relation to manufacture, citing the Tribunal's decision in CCE Mumbai Vs. GTC Ltd. The respondent's counsel, on the other hand, relied on Circular No.943/4/2011-CX and the decision of the Hon'ble High Court of Mumbai in CCE Nagpur Vs. Ultratech Cement Ltd. to support the admissibility of the credit.

The judge considered the arguments presented by both sides. It was highlighted that the issue of whether the definition of input service should be treated similarly to input had already been decided by the Hon'ble High Court of Karnataka in the case of ABB Ltd., upholding the decision of the Larger Bench of the Tribunal in the same case. Additionally, the judge noted that the decision of the Hon'ble Supreme Court in Maruti Suzuki Ltd. was distinguished in the case of Ultratech Cement Ltd. by the Hon'ble High Court of Mumbai. The judge also acknowledged the view of the Board that CENVAT Credit on sales commission is admissible.

Based on the above analysis, the judge concluded that the appeal filed by the Revenue lacked merit and deserved to be rejected. Therefore, the appeal was rejected, affirming the decision of the ld. Commissioner (Appeals) regarding the admissibility of the service tax paid by the Commission Agent as CENVAT credit under Business Auxiliary Service.