9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (8) TMI 137 - AT - Central ExciseCENVAT Credit - input services - tour packages provided to dealers - nexus with sales promotion or not - HELD THAT - Hon ble Gujarat High Court in the case of GUJARAT STATE FERTILIZERS AND CHEMICALS LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, SURAT-II 2016 (1) TMI 1063 - GUJARAT HIGH COURT had examined the particular agreement and it was clear that as per the said agreement the agents were appointed as stockiest - in the present case the tour packages were arranged for dealers. Further, this Tribunal in the case of SIMBHAOLI SUGAR LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, MEERUT-II 2018 (4) TMI 1657 - CESTAT ALLAHABAD have held that if commission is paid to sales commission agent for effecting sale of goods manufactured by the assessee then service tax paid on such commission would be available as input service credit to the manufacturer. Thus, it was possible for the appellant to pay in cash expenses for tour. Instead they have provided them tour packages. Therefore, the said tour packages can be considered as dealer s commission. Therefore, Cenvat credit of service tax paid on tour packages are admissible as Cenvat credit in the present case. Appeal allowed - decided in favor of appellant.
Issues: Admissibility of Cenvat credit on service tax paid for tour packages provided to dealers.
Analysis: 1. Issue of Admissibility of Cenvat Credit: The appellant, engaged in manufacturing, availed Cenvat credit of service tax paid on tour packages provided to their dealers. Revenue contended that the tour packages were not related to sales promotion, making the Cenvat credit inadmissible. The Original Adjudicating Authority upheld the demand and imposed a penalty, a decision affirmed by the learned Commissioner (Appeals). The appellant challenged this before the Tribunal. 2. Interpretation of Precedents: The appellant cited the case of M/s Simbhaoli Sugar Ltd. vs. Commissioner of Central Excise, Meerut, while arguing that the ruling of the Hon'ble Gujarat High Court in the case of Gujarat State Fertilizers & Chemicals Ltd. was not applicable as it pertained to sales agents, which were not involved in the present case. 3. Tribunal's Analysis: The Tribunal examined the submissions from both parties and reviewed the precedents cited. It noted that the Gujarat High Court's ruling focused on the appointment of agents as stockists, unlike the situation where tour packages were arranged for dealers. Referring to the M/s Simbhaoli Sugar Ltd. case, the Tribunal emphasized that if commission is paid to sales commission agents for selling manufactured goods, the service tax on such commission is eligible for input service credit. In this case, the Tribunal found that the tour packages could be considered as a form of dealer's commission, making the Cenvat credit on service tax paid admissible. 4. Conclusion: Consequently, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant. The decision was pronounced in open court on 9th December 2019 by Hon'ble Mr. Anil G. Shakkwar, Member (Technical) of the Appellate Tribunal CESTAT Allahabad.
|
