2018 (2) TMI 897 - AT - Central Excise

CENVAT credit - input service credit - commission paid to the commission agents - Held that - similar issue decided in the case of M/s Dwarikesh Industries Sugar Limited & Ors Vs. CCE, Meerut 2017 (10) TMI 1114 - CESTAT, ALLAHABAD , where it was held that appellants are entitled to avail Cenvat credit on commission paid to the selling agent for selling the goods in terms of Rule 2(l) of the Cenvat Credit Rules, 2004 - refund allowed - appeal dismissed - decided against Revenue,

Summary

Issues:
- Interpretation of "input service" definition for availing CENVAT credit on commission paid to commission agents.
- Admissibility of CENVAT credit on Business Auxiliary Service (BAS) for sales commission.
- Contrary judgments on availing CENVAT credit for commission paid to selling agents.

Interpretation of "input service" definition:
The Revenue contested the availing of CENVAT credit by the respondent on commission paid to commission agents, citing a wrong interpretation of the "input service" definition. The Revenue authorities argued that the credit was wrongly claimed during the relevant period. The learned A.R. relied on a decision of the Hon’ble High Court of Gujarat, which was also referred to by the original authority.

Admissibility of CENVAT credit on Business Auxiliary Service (BAS) for sales commission:
The respondent's advocate referred to a clarification issued by CBEC via Circular No.943/4/2011-CX, dated 29th April 2011. The circular clarified that credit is admissible on services related to the sale of dutiable goods on a commission basis. The Tribunal examined a similar issue in a previous case involving M/s Dwarikesh Industries Sugar Limited & Ors Vs. CCE, Meerut, where it was held that CENVAT credit for commission paid to selling agents for goods sale is permissible under Rule 2(l) of the CENVAT Credit Rules, 2004.

Contrary judgments on availing CENVAT credit for commission paid to selling agents:
The Tribunal considered conflicting judgments on the admissibility of CENVAT credit for commission paid to selling agents. While the Hon’ble High Court of Punjab & Haryana supported the admissibility of such credit, the High Court of Gujarat had a different stance. In light of these contradictory judgments, the Tribunal decided independently, referencing its own decisions in cases like Essar Steel India Ltd., Maheshwari Solvent Extraction Ltd., and others. The Tribunal concluded that the appellants are entitled to avail CENVAT credit on commission paid to selling agents for selling goods, dismissing the Revenue's appeal due to lack of merit.

This comprehensive analysis of the judgment highlights the key issues, arguments presented by both parties, relevant legal precedents, and the Tribunal's final decision based on the interpretation of the law and past rulings.