2008 (12) TMI 123 - AT - Service Tax

Respondent who is manufacturer availed Cenvat credit facility had utilized the services of commission agents for procuring the orders for their finished goods - whether the Respondent availing the services of commission agents are eligible for taking credit of the service tax paid by the commission agents on the commission received by them - services provided by the commission agents have to be treated as input services - Commissioner (Appeals) has rightly allowed the Cenvat credit

Summary

Issues:
Whether the Respondent availing the services of commission agents is eligible for taking credit of the service tax paid by the commission agents on the commission received by them.

Analysis:
The case involved a dispute regarding the eligibility of the Respondent to avail Cenvat credit for service tax paid by commission agents. The Deputy Commissioner disallowed a portion of the credit, leading to an appeal. The Commissioner (Appeal) confirmed the disallowance of a part of the credit but set aside the order for the service tax on the commission received by the commission agent. The Revenue appealed against this decision.

The Departmental Representative argued that post-removal activities are not covered under the definition of 'input service.' On the other hand, the Respondent's Counsel contended that services provided by commission agents, akin to sales promotion, fall under the definition of 'input service.' The Counsel cited relevant Tribunal judgments supporting their stance.

After hearing both sides, the Member (Technical) analyzed the definition of 'input service' under the Cenvat Credit Rules, 2004. It was noted that services related to sales promotion, including those provided by commission agents, are covered under the definition. The Member referred to previous Tribunal judgments supporting this interpretation. Consequently, the Commissioner (Appeal) was found to have rightly allowed the Cenvat credit for service tax paid on the commission received by the commission agents. The Revenue's appeal was dismissed, upholding the impugned order.

In conclusion, the judgment clarified that services provided by commission agents for procuring orders are akin to sales promotion and fall under the definition of 'input service.' The decision was supported by previous Tribunal judgments, leading to the dismissal of the Revenue's appeal.