2018 (3) TMI 1230 - AT - Central Excise

CENVAT credit - commission agent for promotion of business in export and domestic sale of goods - Held that - identical issue has come up before the Tribunal in the case of M/s. J K Lakshmi Cement Ltd. & others vs. CCE & ST, Udaipur 2017 (12) TMI 426 - CESTAT NEW DELHI , where it was held that the CBEC vide Circular No.943/4/2011-CX. Dated 29/04/2011 has clarified that Cenvat credit is admissible on the services of the sale of the dutiable goods on commission basis - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Admissibility of Cenvat credit on commission paid for sale promotion activities.

Analysis:
The appeal was filed against the Order-in-Original No. 15-19/2016 dated 29.7.2016. The appellant, engaged in manufacturing MS ingots and sponge iron, acted as a commission agent for promoting business in export and domestic sales. The dispute covered the period from 2005-2006 to 2014, with five show cause notices issued. The appellant's commission was paid through account payee cheques, which the department denied crediting. The appellant, feeling aggrieved, filed the appeal.

The Tribunal heard both parties and reviewed the available material. Referring to a similar case involving M/s. J K Lakshmi Cement Ltd. & others vs. CCE & ST, Udaipur, the Tribunal noted a circular clarifying the admissibility of Cenvat credit on commission paid for sale promotion activities. The circular was endorsed by the Central Government through a notification. The Tribunal highlighted the conflict in judgments by different High Courts and the declaratory nature of the notification, which it considered effective retrospectively. Citing relevant paragraphs from previous decisions, the Tribunal found no merit in the impugned orders and allowed the appeals in favor of the appellants.

Based on the settled legal position and previous decisions, the Tribunal found no justification to uphold the impugned order and set it aside. Consequently, the appeal was allowed, following the Tribunal's earlier decision. The judgment was dictated and pronounced in the open court, concluding the matter in favor of the appellants.