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TMI Blog2017 (1) TMI 971X X X X Extracts X X X X X X X X Extracts X X X X ..... ission paid on sales needs to be taken as services related to sales promotion - CENVAT credit allowed - appeal allowed - decided in favor of assessee. - E/2292/2012-SM - Final Order No. 20042 / 2017 - Dated:- 13-1-2017 - Shri S. S. Garg, Judicial Member Shri N. Jagadish, AR For the Appellant Shri Rajesh Kumar, CA For the Respondent ORDER Per S. S. Garg The present appeal has been filed by the Revenue against the impugned order dated 16.5.2012 passed by the Commissioner (A) whereby the Commissioner (A) has allowed the appeal of the respondent and set aside the Order-in-Original. 2. Briefly the facts of the case are that the respondents are manufacturers of excisable goods falling under chapter 73 and 76 of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sales is a part of sales activity and further the demand is hit by limitation as there was no intention to evade duty, as such, by taking credit wrongly. As it was a mere interpretation of law and under bona fide belief, the credit was taken. After considering the submissions of the assessee, the learned Commissioner (A) allowed the appeal of the assessee and set aside the Order-in-Original. Aggrieved by the said order, the Revenue has filed the present appeal. 3. Heard the learned AR and the learned CA for the assessee/respondent. 4. The learned AR submitted that the impugned order allowing the sales commission being input service is wrong and not sustainable in law. He further submitted that the learned Commissioner (A) has wrongly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Rule 2(l) which is as under: Explanation: For the purpose of this clause, sales promotion includes services by way of sale of dutiable goods on commission basis. He further submitted that this Explanation makes it amply clear that the same is applicable retrospectively and this has been specifically held by the Division Bench of this Tribunal in the case of Essar Steels India Pvt. Ltd. vs. CCE: 2016-TIOL-520-CESTAT-AHM. wherein it was held that Explanation inserted in Rule 2(l) of CCR, 2004 by Notification No.2/2016 is declaratory in nature and effective retrospectively. 6. After considering the submissions of both the parties and perusal of the evidence, I find that the impugned order is well reasoned order based upon judici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the commission paid on sales needs to be taken as services related to sales promotion. My view is also buttressed by the decisions of higher forum, wherein it is held that commission on sales becomes part of sales promotion and hence eligible for CENVAT under Cenvat Credit Rules, 2004. A few of such decisions are relied upon: * Hon ble CESTAT Principal Bench, New Delhi in the case of HEG Ltd., Raipur [2010 (18) STR 446 (Tri.-Del.)], while dismissing the appeal filed by the Commissioner of Central Excise has categorically ruled that: 5.3 Commission on sale is clearly expenses relatable to sales promotion and is covered under the definition of input services which specifically includes sales promotion and therefore, the same are t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion agents. There is nothing in the definition of input service from which it can be concluded that the services, either mentioned in the main definition or mentioned in the inclusive portion of the definition of input service have to be provided upto the place of removal only, as, if this criteria is adopted, a number of services like coaching and training, market research, credit rating, share registry etc. would not be eligible for Cenvat credit. The judgment of Hon ble Punjab Haryana High Court in the case of Ambuja Cements Ltd. v. Union of India (supra) cited by the learned Departmental Representative is in respect of the service of outward transportation from the factory/depot and in respect of that service only Hon ble High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther, I also find that the Hon ble High Court of P H in the case of Ambika Overseas cited supra have clearly held that the sale and manufacture are directly interrelated and the commission paid on sales needs to be taken as services related to sales promotion. Further, I follow the ratio of Essar Steels India Pvt. Ltd. cited supra, wherein the Division Bench of this Tribunal after discussing all the previous cases and the Rules of interpretation, has held that the Explanation inserted in Rule 2(l) of CCR, 2004 by Notification No.2/2016 is declaratory in nature and is applicable retrospectively. Therefore, in view of the discussions above, I do not find any infirmity in the impugned order which is well reasoned. Consequently I dismiss th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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