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TMI Blog2015 (9) TMI 575X X X X Extracts X X X X X X X X Extracts X X X X ..... ut service even during period prior to 1-4-2011. - Appeal No. E/88903/13 - - - Dated:- 21-7-2015 - Anil Choudhary, Member (J) And Raju, Member (T), JJ. For the Appellant : Shri M H Patil, Adv For the Respondent : Shri Ajay Kumar, Jt Comm (AR) ORDER Per : Raju 1. This appeal is directed against Order-in-Original No.23/MAK(23)/COMMR/RGD/13-14 dated 28/06/2014 passed by Commissioner of Central Excise, Raigad. 2. The appellants are manufacturers of steel products and employed various agents for sale of their products. The agents are registered as commission agents under Business Auxiliary Service and pays service tax on the same. The appellants were availing credit of the said service tax paid. The appellants were issued show-cause notice claiming that the said credit taken during the period 2007-08 to 2011-12 is not admissible under Cenvat Credit Rules. The show-cause notice relies on the decision, of this Tribunal in the case of Vikram Ispat vs. CCE Raigad, - vide order No. A/227-230/09/SMB/C-IV dated 01/06/2009 (passed in Appeal Nos. ST/241 to 244/08), wherein it is held that: Any service to be brought within the ambit of definition of input serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Maharashtra seamless Ltd., the issue was that the service tax paid on the services of the sales agent by way of a commission did not appear eligible as an input service. In the said order reliance was placed on the judgement of the Hon'ble High Court of Gujarat in CCE Ahmedabad-II vs. Cadila Healthcare Ltd., - 2013 (1) ECS (1) Guj HC) to hold that credit is eligible on Sales Commission when it includes sales promotion also and not on pure sale alone. It was also felt that Boards Circular No. 943/4/2011-CX dated 29/04/2011 had clarified that input service credit is admissible with reference to the head Sales Promotion and not to mere sale activity. The Chief Commissioner while reviewing the order has vide letter No. F. No. IV/17-101/CCO II/MCX/2013/10224 dated 10/09/2013 opined that the correct interpretation of Boards order is as under: As per clarification given at Sr. No. 5 of the Board's Circular No. 943/4/2011-CX dated 29/04/2011, the assessee is entitled to credit on services of sale of dutiable goods on commission basis. It is felt that the interpretation of the aforesaid Board's Circular to be pertaining to Sale Promotion in the OIO is incorrect as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as indeed an increase in the sales of goods as a result of their activity. 6. We have considered the submissions made by both the sides. 6.1 It is seen that the evidence produced by the appellant clearly shows that they are not only selling the goods but also actively approaching new clients, putting advertisements, giving diaries and calendars. These activities are clearly be termed as Sales Promotion activities and not merely sales activities. To that extent, the decisions relied by the learned AR are distinguishable. 6.2 Further it is seen that department itself has changed it's stand on the issue. The same Commissioner has in his later order stated so (para 4.1 of this order refers). 6.3 We find that the decisions of this Tribunal in the case of Rosa Sugar Works vs. CCE, Lucknow - Appeal No. 149-153 of 2011 (SM) is clearly applicable to this case. The said decision has been given after considering the decisions of Cadila Healthcare Ltd. The Tribunal in the case of Birla Corporation Ltd., Vs. CCE, Lucknow- 2014 (35) STR 977 (Tri-Del) has examined a case under similar circumstances and observed as follows: 7. The only point of dispute in this case is as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used directly or indirectly in or in relation to the manufacture of final products, whereas the inclusive part of the definition of input service covers various services used in relation to the business of manufacturing the final products. In other words, the definition of input service is very wide and covers not only services, which are directly or indirectly used in or in relation to the manufacture of final products but also includes various services used in relation to the business of manufacture of final products, be it prior to the manufacture of final products or after the manufacture of final products. To put it differently, the definition of input service is not restricted to services used in or in relation to manufacture of final products, but extends to all services used in relation to the business of manufacturing the final product. 29. The expression activities in relation to business in the definition of input service postulates activities which are integrally connected with the business of the assessee. If the activity is not integrally connected with the business of the manufacture of final product, the service would not qualify to be a input service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Business Auxiliary Service (BAS) on account of sales commission now disallowed after the deletion of expression activities related to business , clarified as under The definition of input service allows all credit on services used for clearance of final products upto the place of removal. Moreover, activity of sale promotion is specifically allowed and on many occasions, the remuneration for the same is linked to actual sale. Reading the provision harmoniously, it is clarified that credit is admissible on the services of sale of dutiable goods on commission basis. Thus according to this circular, the service of commission agents (Business Auxiliary Service) is covered by the term advertisement or sales promotion . In my view, there is nothing in this circular which is contrary to the provisions of law and hence the same would be binding on the Departmental officers. Thus, in view of this circular also, though it is in respect of definition of input service during period w.e.f. 1-4-2011, commission agents service would be cenvatable as the term advertisement and sales promotion was there in the definition of input service even during period prior to 1-4-2011. 9. In v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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