9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (5) TMI 297 - AT - Central ExciseCENVAT Credit - input services - sales incentives paid by them are in the nature of sales commission or not - Consulting Engineer service - Telecommunication service - Stockbroker service - Company Secretary/Chartered Accountant Services - Insurance Services - Courier service - denial on the ground of nexus with output - Annual Maintenance of Xerox machines - Car rentals - Renting of Immovable property - Tour operating services - Credit denied for not adducing evidence - Renting of office building - Billing in the name of units/service provided to other units - Credit taken twice - Service Tax Registration No. not mentioned in the invoice - Bills in the name of other companies - Without Specified documents - Without documents. Sales incentives paid by them are in the nature of sales commission or not - HELD THAT - Whether the services rendered by Veljan are in the nature of Sales Promotion as claimed by the Appellant or are in the nature of mere sales on which commission was paid, as claimed by the Revenue, under both the cases the Cenvat Credit cannot be denied to the Appellant - Order procurement itself means that they are canvassing and promoting the products of the Appellant. It is seen that the Adjudicating Authority has relied on the case law of COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD II VERSUS M/S CADILA HEALTH CARE LTD. 2013 (1) TMI 304 - GUJARAT HIGH COURT - Adjudicating Authority has taken the view that since the incentive is paid @ 10% of the total sales, this incentive is paid only Sales Commission ignoring the fact that without canvassing and procuring the order the sales could not have taken place. Therefore the decision of Cadila Healthcare Ltd actually supports the case of the Appellant. The subsequent clarification given under Circular No. 943/4/2011-CX dt.29.04.2011 and addition of Explanation to the definition of BAS vide Notification No. 02/2016 dt.03.02.2016 shows the legislative intent that the assessee should not be deprived of the Cenvat Credit even when mere sales commission is paid where sales promotion may not be involved. The amended notification, in effect means that the Cenvat Credit would be eligible not only for the sales promotion services per se but also for commission paid on pure sales - In any view of the matter as to whether the services rendered by Veljan are in the nature of Sales Promotion as claimed by the Appellant or are in the nature of mere sales on which commission was paid, as claimed by the Revenue, under both the cases the Cenvat Credit cannot be denied to the Appellant. CENVAT credit denied on account of credit taken for various services like consulting engineer, stock broker, etc. - HELD THAT - The factual details are required to be verified by the Adjudicating Authority to come to a conclusion as to whether the Appellant is eligible for CENVAT credit or not. This exercise cannot be taken up at the Tribunal level - matter remanded to the Adjudicating Authority for confirmation of such demands - The Adjudicating Authority may pass an Order after due verification of all documentary evidence produced before him for the present appellant. Since the issue pertains to 2006-08, the Adjudicating Authority is directed to pass a suitable order within Four months from the date of receipt of this order. Cenvat Credit taken on Incentives paid, credit allowed, Appeal allowed. Cenvat Credit in respect of various services, Matter remanded to the Adjudicating Authority. Appeal disposed off.
Issues Involved:
1. Eligibility of Cenvat Credit on sales incentives paid. 2. Denial of Cenvat Credit on various input services due to lack of nexus with output. 3. Denial of Cenvat Credit for not adducing evidence. 4. Denial of Cenvat Credit on renting of office building used by other group companies. 5. Denial of Cenvat Credit for billing in the name of units/service provided to other units. 6. Denial of Cenvat Credit taken twice. 7. Denial of Cenvat Credit due to Service Tax Registration No. not mentioned in the invoice. 8. Denial of Cenvat Credit on bills in the name of other companies. 9. Denial of Cenvat Credit without specified documents. 10. Denial of Cenvat Credit without documents. 11. Invocation of extended period of limitation. Summary: 1. Eligibility of Cenvat Credit on Sales Incentives Paid: The Appellant argued that the incentives paid to M/s Veljan Hydrair Ltd for export coordination should be considered as "sales promotion" services, making them eligible for Cenvat Credit. The Adjudicating Authority had erroneously classified these as "sales commission" services, denying the credit based on the case law of CCE Ahmedabad-II vs Cadila Healthcare Ltd. The Tribunal found that the activities undertaken by Veljan, including canvassing and procuring orders, constituted sales promotion. The Tribunal also referenced CBIC Circular No. 943/4/2011-CX and Notification No. 02/2016, which clarified that sales promotion includes services by way of sale of dutiable goods on commission basis. The Tribunal concluded that the Appellant was eligible for Cenvat Credit on sales incentives paid, allowing the appeal for Rs. 1,11,99,110. 2. Denial of Cenvat Credit on Various Input Services: The Appellant contended that the denial of Cenvat Credit on services like Consulting Engineer, Telecommunication, and Stockbroker was due to improper verification of documentary evidence by the Adjudicating Authority. The Tribunal remanded the matter to the Adjudicating Authority to verify the eligibility of Cenvat Credit on these services, including Consulting Engineer (Rs. 62,595), Telecommunication (Rs. 2,155), Stockbroker (Rs. 5,324), Company Secretary/Chartered Accountant Services (Rs. 1,041), Insurance Services (Rs. 1,039), and Courier (Rs. 308). 3. Denial of Cenvat Credit for Not Adducing Evidence: The Tribunal remanded the issue of denied Cenvat Credit for services like Annual Maintenance of Xerox machines (Rs. 74,200), Car rentals (Rs. 514), Renting of Immovable property (Rs. 1,29,169), and Tour operating services (Rs. 46,208) due to lack of evidence, instructing the Adjudicating Authority to verify the documentary evidence. 4. Denial of Cenvat Credit on Renting of Office Building Used by Other Group Companies: The Tribunal remanded the issue of Cenvat Credit denial for renting office buildings (Rs. 64,374) used by other group companies for further verification by the Adjudicating Authority. 5. Denial of Cenvat Credit for Billing in the Name of Units/Service Provided to Other Units: The Tribunal remanded the issue of Cenvat Credit denial for billing in the name of units/service provided to other units (Rs. 19,724) for verification by the Adjudicating Authority. 6. Denial of Cenvat Credit Taken Twice: The Tribunal remanded the issue of Cenvat Credit taken twice (Rs. 573) for verification by the Adjudicating Authority. 7. Denial of Cenvat Credit Due to Service Tax Registration No. Not Mentioned in the Invoice: The Tribunal noted that the Cenvat Credit denial for Service Tax Registration No. not mentioned in the invoice (Rs. 2,044) was already admitted and paid by the Appellant. 8. Denial of Cenvat Credit on Bills in the Name of Other Companies: The Tribunal noted that the Cenvat Credit denial on bills in the name of other companies (Rs. 10,39,607) was already admitted and paid by the Appellant. 9. Denial of Cenvat Credit Without Specified Documents: The Tribunal noted that the Cenvat Credit denial without specified documents (Rs. 3,820) was already admitted and paid by the Appellant. 10. Denial of Cenvat Credit Without Documents: The Tribunal noted that the Cenvat Credit denial without documents (Rs. 1,22,335) was already admitted and paid by the Appellant. 11. Invocation of Extended Period of Limitation: The Appellant argued that the invocation of the extended period of limitation was unjustified as all facts were recorded and made available to the Department. The Tribunal did not specifically address this issue in the final order. Conclusion: (a) Cenvat Credit taken on incentives paid - Appeal allowed. (b) Cenvat Credit in respect of various services - Matter remanded to the Adjudicating Authority for verification. The appeal was disposed of accordingly.
|
