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2018 (2) TMI 363 - AT - Central ExciseCENVAT credit - input/input services - Welding Electrodes, Paint & Thinner, Flexible Rolls and Water Treatment Chemicals - sale commission - Held that - The issue is covered by this Tribunal judgment in the case of U.G. Sugar & Indus. Ltd. 2016 (11) TMI 1326 - CESTAT ALLAHABAD wherein it has been held CENVAT credit on Capital goods, Welding electrodes, winding wire, MS wire, MS angle, CAF jointing sheets and asbestos packings used as capital goods in sugar factory eligible to credit as per Rules 2 and 3 of CCR 2004 - credit allowed. Cenvat Credit of service tax on commission paid to agents - the respondent made a submission that agents procures Orders for which commission is charged, therefore there is nexus in procurement of Orders and manufacture & clearance of sugar - Held that - reliance placed in the case of Dwarikesh Sugar Industries Ltd. & others 2017 (10) TMI 1114 - CESTAT, ALLAHABAD , where it was held 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 CCR 2004 - credit allowed. Appeal dismissed - decided against appellant-Revenue.
Issues:
1. Whether Cenvat Credit on items namely Welding Electrodes, Paint & Thinner, Flexible Rolls, and Water Treatment Chemicals is admissible as input under Rule 2(k) of Cenvat Credit Rules 2004? 2. Whether Cenvat Credit of service tax on sale commission is admissible under the definition of input service under Rule 2(l) of Cenvat Credit Rules 2004? Analysis: Issue 1: The appeal involved a dispute over the admissibility of Cenvat Credit on various items used in the manufacturing process of sugar and molasses. The respondent had availed Cenvat Credit on items such as Steel Tubes, Chain Spare Parts, Nickel Screen, and various other machinery parts. The dispute specifically focused on the admissibility of Cenvat Credit on Welding Electrodes, Paint & Thinner, Flexible Rolls, and Water Treatment Chemicals. The adjudicating authority allowed credit on some items but disallowed it on others. The Commissioner (Appeals) subsequently allowed the appeal filed by the respondent, leading to the Revenue appealing against this decision. Issue 2: The second issue revolved around the admissibility of Cenvat Credit on service tax paid as a commission to agents for procuring orders. The respondent argued that such commission payments were covered under the definition of input service under Rule 2(l) of Cenvat Credit Rules 2004. The respondent cited various judgments to support their claim, emphasizing the nexus between the commission paid and the procurement of orders leading to the sale of sugar. The Tribunal examined the evidence and submissions, ultimately upholding the Commissioner (Appeals) decision and dismissing the Revenue's appeal. The Tribunal's analysis delved into the specifics of each item in question, considering the evidence provided by the respondent and relevant legal precedents. The judgment highlighted the broad scope of the definition of input under Rule 2(k) of the Cenvat Credit Rules 2004, emphasizing that unless covered by exclusion clauses, all goods used in the manufacturing process were eligible for Cenvat Credit. The Tribunal also referenced previous judgments that supported the admissibility of Cenvat Credit on similar items, reinforcing the decision to allow the credit on Welding Electrodes, Paint & Thinner, Flexible Rolls, and Water Treatment Chemicals. Regarding the Cenvat Credit on service tax paid as commission to agents, the Tribunal examined conflicting judgments but ultimately relied on the nexus between commission payments and the sale of goods manufactured by the appellant. The Tribunal's decision was influenced by previous rulings that supported the admissibility of such credits, ultimately leading to the dismissal of the Revenue's appeal due to lack of merit.
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