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TMI Blog2016 (1) TMI 1063X X X X Extracts X X X X X X X X Extracts X X X X ..... reference to attempt to sales promotion would not change the very basic nature of agreement and the relations between the appellant and the stockist converting the stockist as sales promotion agent. Payment to the agents appointed by the appellant would not be eligible for cenvat credit. - Decided against the assessee. - TAX APPEAL NO. 994 of 2015 - - - Dated:- 6-1-2016 - MR. AKIL KURESHI AND MR. MOHINDER PAL, JJ. FOR THE APPELLANT : MR HARDIK P MODH, ADVOCATE (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. The appeal is filed challenging the judgement of CESTAT raising the following questions for our consideration : 1) Whether the Tribunal was correct in relying upon the decision passed by the Hon'ble Gujarat Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r than sales promotion. In view of this fact the assessee's case is squarely covered under the above stated High Court's judgement and service provided by commission agent does not fall within the purview of the main or inclusive part of the definition of 'input service' as laid down in rule 2(l) of th Rules and, therefore, the assessee is not eligible for Cenvat credit in respect of the service tax paid on commission paid to the commission agents. 3. The appeal of the assessee was dismissed by the Commissioner (Appeals) upon which a further appeal to the Tribunal was filed. The Tribunal also placed heavy reliance on the decision of this Court in case of Cadila Healthcare ltd. (supra) and dismissed observing as under : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argeted. Such activities relate to promotion of sales in general to the consumers at large and are more in the nature of the activities referred to in the preceding paragraph. Commission agent has been defined under the explanation to business auxiliary service and insofar as the same is relevant for the present purpose means any person who acts on behalf of another person and causes sale or purchase of goods, or provision or receipt of services, for a consideration. Thus, the commission agent merely acts as an agent of the principal for sale of goods and such sales are directly made by the commission agent to the consumer. In the present case, it is the case of the assessee that service tax had been paid on commission paid to the commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s noted above to indicate that such commission agents were involved in the activity of sales promotion as explained in the earlier portion of the judgement, in the opinion of this court, the claim of the assessee was rightly rejected by the Tribunal. Under the circumstances, the adjudicating authority was justified in holding that the commission agent is directly concerned with the sales rather than sales promotion and as such the services provided by such commission agent would not fall within the purview of the main or inclusive part of the definition of input service as laid down in rule 2(l) of the Rules. (ix) As regards the contention that in any event the service rendered by a commission agent is a service received in relation to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red by commission agents can be said to be an activity which is analogous to any of the said activities. The activity of commission agent, therefore, should bear some similarity to the illustrative activities. In the opinion of this court, none of the illustrative activities, viz., accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security is in any manner similar to the services rendered by commission agents nor are the same in any manner related to such services. Under the circumstances, though the business activities mentioned in the definition are not exhaustive, the service rendered by the commission agents not being analogous to the activiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the insurance coverage for materials stored at its godown. As per clause(4), all expenses incurred in selling or storing the products would be borne by consignment stockist. Clause(7) pertains to the commission to be paid to the consignment stockist which was graded depending on the sales turn over. 7. Thus predominantly the entire agreement was one in the nature of appointing a partnership firm as stockist of the appellant company who would upon being supplied the goods in question would store the same and dispose of in the market at agreed rates upon which would receive certain commission. 8. A fleeting reference to attempt to sales promotion would not change the very basic nature of agreement and the relations between the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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