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2018 (5) TMI 289 - AT - Central ExciseCENVAT credit - sales commission paid to agents - Held that - Considering the number of appeals on the same issue and categorical observation of the Hon ble High Court Gujarat High Court in Astik Dyestuff Pvt. Ltd. s case 2014 (1) TMI 776 - GUJARAT HIGH COURT that the judgment is binding on all situated within the territorial jurisdiction of High Court, in my opinion, it would be inappropriate, to decide the issue following the Division Bench judgment in Essar Steel India Ltd. vs. C.C.E. & S.T., Surat I 2016 (4) TMI 232 - CESTAT AHMEDABAD when the matter is on Board of the High Court. The present appeals are also 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 filed by the Revenue.
Issues Involved:
Eligibility of CENVAT credit on service tax paid on sales commission. Analysis: The judgment by the Appellate Tribunal CESTAT Ahmedabad involved the principal issue of the eligibility of CENVAT credit on service tax paid on sales commission. The Tribunal noted that the Hon'ble Gujarat High Court had previously ruled on this issue in the case of C.C.E. vs. Cadila Healthcare Ltd. and Astik Dyestuff Pvt. Ltd. vs. C.C.E. & Cus. The High Court held that sales commission paid to agents did not fall under the scope of sales promotion as an "input service" under the Cenvat Credit Rules, 2004. Despite a subsequent explanation being inserted into the definition of "input service" through Notification No.2/2016 CE(NT) dated 03.02.2016, clarifying the admissibility of service tax paid on sales commission for CENVAT credit retrospectively, the Revenue challenged this interpretation. The Tribunal acknowledged that the matter was pending before the High Court of Gujarat and decided to wait for the High Court's verdict. This decision was in line with the Tribunal's previous approach in similar cases, such as Ashapura Volclay Ltd and others vs. C.C., Jamnagar. The Tribunal disposed of the appeals with the liberty for both parties to approach the Tribunal after the High Court's decision, emphasizing that no recovery or refund would be processed during this period. Cross-objections were also disposed of accordingly. In conclusion, the judgment focused on the interpretation of the eligibility of CENVAT credit on service tax paid on sales commission, considering the precedents set by the Hon'ble Gujarat High Court and the retrospective clarification provided through a Notification. The Tribunal opted to await the High Court's decision on the matter before making a final determination, ensuring a consistent approach with previous cases and maintaining procedural fairness for both parties involved in the appeals.
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