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2017 (12) TMI 499 - AT - Central ExciseCENVAT credit - input services - sales commission - whether the sales commission paid to agents would fall under the scope of sales promotion mentioned under the inclusive part of the definition of input service prescribed under Rule 2(l) of CCR, 2004? - Held that - the present appeal is disposed of with the liberty to both sides to approach the Tribunal soon after the verdict of the Hon ble High Court in the pending Appeal against the Division Bench judgment of this Tribunal in Essar Steel India Ltd. s case 2016 (4) TMI 232 - CESTAT AHMEDABAD filed by the Revenue, where it was held that even for the period prior to 03.02.2016, the service tax paid on sales commission has been held to be admissible to CENVAT credit - appeal disposed off.
Issues: Eligibility of CENVAT credit on service tax paid on sales commission.
The judgment addresses the principal issue of the eligibility of CENVAT credit on service tax paid on sales commission. The Revenue argued that the Hon'ble Gujarat High Court had previously ruled in cases such as C.C.E. Vs. Cadila Healthcare Ltd. and Astik Dyestuff Pvt. Ltd. Vs. C.C.E. & Cus. that sales commission does not qualify as an input service under the Cenvat Credit Rules. The High Court emphasized that its judgment should prevail over circulars and judgments from other High Courts. Despite a subsequent notification in 2016 clarifying the definition of 'input service,' a Division Bench of the Tribunal in Essar Steel India Ltd. Vs. C.C.E. & S.T. held that the clarification was retrospective, allowing CENVAT credit for service tax on sales commission even before 2016. The Revenue challenged this decision before the High Court of Gujarat, which is currently pending. In light of the conflicting views and the pending appeal, the Tribunal followed the principle laid down in a previous case and disposed of the present appeals, granting both parties the liberty to approach the Tribunal after the High Court's verdict on the pending appeal. No recovery or refund will be processed during this period. The appeals were thus disposed of accordingly.
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