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TMI Blog2008 (1) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... nd K.K. Agarwal, Member (T) [Order per M.V. Ravindran, Member (J)].-1. This appeal is directed against Order-in-Original No. 1 /M-I/2007, dated 27-2-2007, vide which the adjudicating authority has confirmed demand of Rs. 78,50,491/- including education cess and appropriated the amount deposited by the appellant, imposed penalty of equal amount under the provisions of Sec. 11AC of the Central Excise Act, 1944 and also ordered for demand of interest as applicable under the provision of Section 11AB of the Central Excise Act, 1944. 2. The relevant facts that arise for consideration are the appellant i.e. Metro Shoes Pvt. Ltd. (MSPL) manufactured shoes in their factory premises and cleared the same on payment of duty to their own retai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce mainly on the ground that the excisable goods which are manufactured by them i.e. branded footwear, were cleared from their factory premises to the retail shops which are owned by them. It was their submission that the showrooms are their own and there is no sale at the premises where the shoes are manufactured. It was their contention before the adjudicating authority that the sales were effected for the first time from their showrooms and the clearance which took place from their manufacturing premises was only inter depot or inter showroom transfer. It was also contended that the commission charges which are paid to those people in the retail showroom were in fact commissions and Service tax was paid by such people on said commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above order of confirmation of demand of duty submits that the reversal of the Cenvat credit as ordered by the adjudicating authority is incorrect. It is his submission that the appellant had availed input stage credit of the service tax paid by the commission agents at the retail showroom of the appellant themselves. It is his submission that the demand of the duty has been confirmed by the adjudicating authority under the following heads: (i) Services directly and wholly attributable to goods manufactured by the appellant Rs. 62,71,473/- (ii) Services directly and wholly attributable to trading activities Rs.13,27,497/- (iii) Other overhead expenses incurred for running retail outlets Rs. 2,51,581/-. 4. It is his submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place of removal. It is his submission that denial of the service tax paid on the commissions for the services rendered by the commission agents, only on the ground that the services are provided primarily in relation to the sale of goods and thus not in or in relation to the manufacture of goods and clearance of final products. It is his submission that having admitted that the sale of goods through commission agent is a routinely adopted marketing practice, the denial of credit does not arise. He submits that the entire demand as confirmed by the adjudicating authority is liable to be set aside and prays so. 5. Ld. SDR, on the other hand, emphasized that the services utilized by the appellant from the commission agent do not in any wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant for the finished goods manufactured and cleared by them. For the proper appreciation of the said provisions we read the definition of the input services as given in Rule 2(1) of the Central Excise Rules, 2004: "(1) "input service" means any service, - (i) used by a provider of taxable service for providing an output service; or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal, and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or on office relating to such factory or premises, advertisement or sales promotion, ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... removal. The services utilized by the appellant till the place of removal and the service tax paid thereon are to be considered as services utilized by him for the manufacture of final product and clearance of the same from the place of removal. This would indicate that the services which are rendered by various service providers during the course of transportation of the final product from the appellant's factory premises to their own showrooms located in various place, for e.g. GTA, warehousing facilities, C F agents, insurance, internet services, security, courier services, telecom services, pest control services, bank services etc. and service tax paid on such services would be eligible as credit being the services used by the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X
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