2018 (9) TMI 1420 - AT - Central Excise

CENVAT Credit - input services - services of Commission Agents to develop its market and promote sales - Held that - The Tribunal has been consistently allowing the Cenvat Credit under similar circumstances - In the appellant s own case M/S ULTRATECH CEMENT LTD. AND M/S JAQUAR AND COMPANY PVT LTD. VERSUS CCE & ST, ALWAR 2017 (12) TMI 891 - CESTAT NEW DELHI Cenvat Credit has been allowed by holding that 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 dismissed - decided against Revenue.

Summary

Issues:
1. Entitlement to Cenvat Credit for Service Tax paid by Commission Agents under Cenvat Credit Rules, 2004.

Analysis:

The appeal involved a dispute regarding the entitlement of the respondent, engaged in the manufacture of cement and related products, to avail Cenvat Credit for Service Tax paid by Commission Agents during the period of October 2014 to March 2015. The Original Authority initially denied the Cenvat Credit based on a decision of the Hon'ble Gujarat High Court. However, subsequent to that decision, the Central Board of Excise and Customs (CBEC) issued a Circular clarifying the admissibility of Cenvat Credit on services of sale of goods on a commission basis. This Circular was also endorsed by the Central Excise through a notification. The Tribunal had consistently allowed Cenvat Credit under similar circumstances, as seen in previous cases. Notably, in the appellant's own case reported earlier, Cenvat Credit had been allowed by the Tribunal. The Tribunal referred to a Circular and a notification to support its decision, emphasizing the retrospective effect of the notification in resolving conflicting views of different High Courts. The Tribunal concluded that the Explanation inserted in Rule 2(l) of the Cenvat Credit Rules, 2004, should be considered declaratory in nature and effective retrospectively.

In the present appeal, after hearing arguments from both sides and examining the legal developments and precedents on the subject, the Member (Technical) found no merit in the Revenue's appeal. The Member upheld the impugned order that allowed the respondent to avail the Cenvat Credit for the Service Tax paid by Commission Agents. The decision was based on the Tribunal's consistent approach in similar cases and the legal clarity provided through Circulars and notifications. Consequently, the appeal by the Revenue was rejected, and the impugned order was upheld. The judgment was dictated and pronounced in an open court setting.