2016 (10) TMI 234 - AT - Central Excise

Denial of CENVAT credit - input service - commission paid to consignment agents - whether the denial of cenvat credit on commission paid to consignment agents, on the ground that the said service is not eligible as input service and consignment agent service is beyond the place on removal of goods, is justified? - Held that - Section 4(c)(iii) of the Central Excise Act, 1944 defines place of removal as a depot, premises of a consignment agent or any other place or premises from where the excisable goods are to be sold after their clearance from the factory . The premises of the consignment agents are covered in place of removal. The appellant correctly taken cenvat credit on commission paid to consignment agents as same has been included in the assessable value. Cenvat credit on commission paid to consignment agent allowed - appeal allowed - decided in favor of assessee.

Summary

Issues:
- Denial of cenvat credit on commission paid to consignment agents based on the argument that the service is not eligible as an input service and that consignment agent service is beyond the place of goods removal.

Analysis:
The appellant appealed against the denial of cenvat credit on commission paid to consignment agents, contending that the service falls within the definition of input service as per Section 4(c)(iii) of the Central Excise Act, 1944. The Revenue argued that since the service of commission agent is beyond the factory gate, the credit is not eligible. The Ld. Commissioner (A) relied on a previous decision to support this view. However, the appellant argued that the case cited was about commission agents, not consignment agents, and that consignment agents and commission agents are distinct entities. The appellant maintained that consignment agents' premises are considered part of the place of goods removal, thus entitling them to cenvat credit.

The Tribunal examined the provisions of Section 4(c)(iii) of the Central Excise Act, 1944, which includes "premises of a consignment agent" in the definition of the place of removal of goods. Consequently, the Tribunal held that consignment agents' premises are indeed part of the place of removal, making the appellant eligible for cenvat credit on commission paid to consignment agents. The Tribunal distinguished the case cited by the Revenue, emphasizing that it pertained to commission agents, not consignment agents, and therefore was not directly applicable to the current case. As a result, the Tribunal set aside the impugned order and allowed the appeal, granting consequential relief to the appellant.