2016 (11) TMI 43 - AT - Central Excise

CENVAT credit - commission paid - commission agent situated abroad - reverse charge mechanism - Held that - the decision of the Tribunal in the appellant s own case 2015 (2) TMI 755 - CESTAT MUMBAI is squarely on the subject, which clearly indicates that the appellant is eligible to avail the cenvat credit of such commission paid to foreign commission agent. The appellant is eligible to utilize the cenvat credit for discharge of such service tax liability - following the same, the impugned order is unsustainable. Reliance placed on the decision of case ITC Ltd. vs. CCE, Guntur 2011 (3) TMI 186 - CESTAT, BANGALORE by departmental representative - the facts are totally different as in case, ITC Ltd. was not providing any output service or they were not manufacturing any dutiable final product while in the case in hand, it is an admitted fact that the appellant is manufacturing dutiable product. CENVAT credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Availment of cenvat credit on service tax paid to foreign commission agent

Analysis:
The appeal in question was against an order-in-appeal dated 10.11.2012 concerning the availment of cenvat credit on service tax paid to a commission agent abroad. The appellant had paid commission to the foreign agent for selling final products and discharged the service tax liability under reverse charge mechanism, claiming credit. The Revenue disputed this credit availed by the appellant.

The Chartered Accountant for the appellant referred to a previous decision by the Bench in the appellant's own case where a similar credit was disputed but was held in favor of the assessee. The departmental representative cited a different case involving ITC Ltd. vs. CCE, Guntur, where it was held that a person discharging tax liability as the deemed output service provider cannot avail cenvat credit.

After considering the submissions, the Member (Judicial) found that the decision in the appellant's own case from 2.1.2015 allowed the appellant to avail cenvat credit on commission paid to the foreign agent. The appellant was deemed eligible to utilize the credit for discharging the service tax liability, leading to the conclusion that the impugned order was unsustainable.

Additionally, the Member noted that the facts in the case cited by the departmental representative were different, as ITC Ltd. was not providing any output service or manufacturing dutiable final products, unlike the appellant. Following the precedent set in the appellant's earlier case, the Member concluded that the appeal had merit and needed acceptance, ultimately allowing the appeal and setting aside the impugned order.