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2017 (10) TMI 1114 - AT - Central ExciseCENVAT credit - whether the appellant is entitled to avail Cenvat credit of service tax on commission paid to service commission agent who causes sale of Sugar & Molasses manufactured by the appellants or not? - Held that - relying on the decision of this Tribunal in the case of Essar Steel India Ltd. 2016 (4) TMI 232 - CESTAT AHMEDABAD , I hold that appellants are entitled to avail Cenvat credit on commission paid to the selling agent for selling the goods in terms of Rule 2(l) of the Cenvat Credit Rules, 2004 - appeal allowed - decided in favor of appellant.
Issues:
Whether the appellant is entitled to avail Cenvat credit of service tax on commission paid to service commission agent who causes the sale of Sugar & Molasses manufactured by the appellants. Analysis: The issue in these appeals revolves around the entitlement of the appellant to avail Cenvat credit of service tax on commission paid to a service commission agent who facilitates the sale of goods manufactured by the appellants. The denial of Cenvat credit was based on a decision by the Hon'ble High Court of Gujarat, which held that commission agents are not engaged in sales promotion. However, this Tribunal, in the case of Essar Steel India Ltd. v. Commissioner of Central Excise & Service Tax, Surat-I, examined the issue of sales promotion activity in relation to Business Auxiliary Service. The Tribunal differentiated between sales promotion and marketing or sale of goods, concluding that the appellant is entitled to Cenvat credit for commission paid to the agent who effects the sale of goods. Additionally, the Tribunal cited a judgment by the Hon'ble High Court of Punjab & Haryana, which held that Cenvat credit on service tax paid to a selling agent for the sale of goods is admissible. Given the conflicting judgments, the Tribunal decided independently, considering the precedent set in the case of Maheshwari Solvent Extraction Ltd. v. Commissioner of Central Excise, Nagpur. The Tribunal held that the appellants are indeed entitled to avail Cenvat credit on commission paid to the selling agent, as per Rule 2(l) of the Cenvat Credit Rules, 2004. In conclusion, the impugned orders denying Cenvat credit are set aside, and the appeals are allowed with any consequential relief deemed necessary.
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