2013 (8) TMI 350 - AT - Central Excise

Cenvat credit of service tax paid on the services of commission agents abroad received by them for procuring export orders Held that - The service received by the respondent is Business Auxiliary Service which as its names suggests the same is in relation to the manufacturing business of the appellant and, hence, the same would be covered by the expression activities relating to business. Moreover during the period of dispute the definition of input service specifically covered the sales promotion and, procuring sales order is nothing but sales promotion Also, relying upon the judgment in the case of Cadila Healthcare Ltd. vs. CCE, Ahmedabad 2009 (8) TMI 172 - CESTAT, AHMEDABAD and CCE, Vapi vs. Nikamal Crates & Bins. 2010 (2) TMI 232 - CESTAT, AHMEDABAD , Cenvat Credit is allowed.

Summary

Issues:
Whether the respondent manufacturer is eligible for Cenvat credit of service tax paid on services of commission agents abroad for procuring export orders.

Analysis:
The dispute in this case revolves around the eligibility of the respondent manufacturer to claim Cenvat credit for service tax paid on services of commission agents abroad. The department denied the credit, contending that the service did not fall under the definition of input service. An order-in-original confirmed a Cenvat credit demand, which was later set aside by the Commissioner (Appeals), leading to the Revenue's appeal.

The tribunal noted that the respondent had utilized the services of commission agents abroad to secure export orders for their final products, resulting in the payment of service tax. The service in question was Business Auxiliary Service, directly related to the manufacturing business of the appellant. The tribunal emphasized that activities relating to business, including procuring sales orders, were covered under the definition of input service during the disputed period. Citing precedents such as Lanco Industries Ltd. vs. CCE, the tribunal established that procuring sales orders constituted sales promotion, making it eligible for Cenvat credit. No conflicting judgments from a higher forum were presented, prompting the dismissal of the Revenue's appeal.

In conclusion, the tribunal upheld the eligibility of the respondent manufacturer for Cenvat credit on service tax paid for services rendered by commission agents abroad for procuring export orders. The decision was based on the service's alignment with business activities and sales promotion, as well as consistent precedents supporting such eligibility.