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TMI Blog2020 (11) TMI 893X X X X Extracts X X X X X X X X Extracts X X X X ..... tiable goods on commission basis - also, this explanation added by way of amendment is declaratory in nature and is applicable retrospectively. The Board vide Circular No.96/85/2015-CX dated 7.2.2015 has clarified that decision in the case of COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD II VERSUS M/S CADILA HEALTH CARE LTD. [ 2013 (1) TMI 304 - GUJARAT HIGH COURT] applies in case where the agent is undertaking only sales and no sales promotion. Whereas in the present case, it is clearly evident from various terms and conditions contained in clause (3) of the Agreement that M/s. FMGIL undertakes the activity of sales promotion. Hence, we hold that the decision in the case of Cadila Healthcare Ltd. is not applicable in the present case. This issue is no more res integra and it has been consistently held that sales commission fall under definition of input service . By following the ratio of the above said decisions, the denial of CENVAT Credit on sales commission is not sustainable in law. Time Limitation - CENVAT credit on outward transportation from factory to the customers premises - HELD THAT:- On the point of limitation, the Division Bench of this Tribunal in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 56,49,735/- ₹ 35,85,570/- ₹ 40,46,760/- Penalty Imposed ₹ 1,35,15,241/- ₹ 2,98,262/- ₹ 56,49,735/- - OIO No. date 31/2011 dated 20.12.2011 4/2012 dated 30.01.2012 41 42/2020 (R) dated 06.11.2013 OIA Nos. date 189-190/2017 dated 03.04.2017 2. For the sake of convenience, the facts of appeal No. E/663/2012 are taken. 2.1 Appellants are engaged in the manufacture of Pistons and rings falling under Chapter 84 of the Central Excise Tariff Act, 1985. Appellant and their sister concern M/s. Federal Mogul Goetze India Limited (hereinafter referred to as FMGIL) are functioning within the common premises and with common human resources at Yelahanka. Similarly, the Head Offices of both the entities at New Delhi are functioning at the same location with the same human resources as well. Further, the two units have separate PAN numbers. Fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 3.2.2016 holding that sales promotion includes services by way of sale of dutiable goods on commission basis. She further submitted that this amendment is declaratory in nature and hence is effected retrospectively. For this submission, she relied upon the following decisions. Essar Steels India Ltd. vs. CCE ST, Surat 2016 (335) E.L.T. 660 (Tri. Ahmd.) Stanley Seating vs. CCE, Bangalore-III 2017 (3) G.S.T.L. 137 (Tri. - Bang.) Simboli Sugar Ltd. vs. CCE, Meerut 2018 (363) E.L.T. 1172 (Tri. All.) Beloorbayir Biotech Limited vs. CCT, Bangalore 2018-VIL-370- CESTAT-BLR-ST 4.1 It is her further submissions that relying upon these cited decisions supra, this Tribunal in the appellant s own case vide Final Order No.20201 20205/2019 dated 25.2.2019 has allowed credit on sales commission covering for the period January 2013 to February 2016. She also submitted that Board vide Circular No.96/85/2015-CX-I dated 7.12.2015 has also clarified that the decision in the case of M/s. Cadila Healthcare Limited: 2013 (30) STR 3 (Guj.-HC) applies in case where the agent is undertaking only sales and not sales promotion. Whereas in the present case, it is clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the present case because the appellants have been regularly filing ER-1 returns disclosing the availment of credit and it is not the case of the department that the appellant has not disclosed the credit availment in their books of accounts or in their returns. Further, the fact of availment of credit of service tax paid on the sales commission paid to FMGIL was known to the department during the CERA audit conducted for the period January 2008 to April 2010. She also submitted that it is a settled law that when the demand is based on audit objection, the extended period is not invokable and also that suppression cannot be alleged when the matter involves interpretation of legal provisions. For this submission, she relied upon the following decisions: CCE ST, Tirupathi vs. Sri Sai Sindu Industries 2017 (49) STR 84 (Tri. Hyd.) Commissioner vs. Dynamic Industries Ltd. 2014 (307) ETL 15 (Guj.) She also submitted that extended period of limitation cannot be invoked for the period May 2010 to July 2011 as department had issued the show-cause notice for the earlier period i.e., December 2006 to April 2010 on the similar facts and issue in dispute. For this, she re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and perusal of the material on record, we find that the only issue involved in the present appeals is viz., denial of CENVAT credit availed on sales commission paid to sister concern M/s. FMGIL for promoting sales and denial of CENVAT credit on service tax paid on outward transportation from factory to buyer s premises during the period from April 2008 to April 2010. Before, we proceed to decide the question involved, it is pertinent to quote the relevant provisions of CENVAT Credit Rules, 2004 pertaining to input services. The definition of input service as contained in Rule 2(l) is reproduced herein below: 2(l) 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 upto 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 an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tently held that sales commission fall under definition of input service . By following the ratio of the above said decisions, we hold that denial of CENVAT Credit on sales commission is not sustainable in law. 7. Coming to the denial of CENVAT credit on outward transportation from factory to the customers premises, learned counsel for the appellant admitted that on merit, the decision of the apex court in the case of CCE vs. Ultra Tech Cement Ltd.: 2018 (9) GSTL 337 (SC) is against the appellant and therefore, she did not argue on merits but submitted that substantial demand is beyond limitation. She further submitted that the department has invoked the extended period of limitation whereas during the relevant period, the Larger Bench of this Tribunal in the case of ABB Ltd. was favour of the appellant and the appellant had a bonafide belief that they are entitled to credit on freight charges paid to the transporter as activity relating to business. She further submitted that out of CENVAT credit of ₹ 2,98,262/-, credit of ₹ 2,41,168/- availed on freight charges paid for the period April 2010 to January 2011 is barred by limitation. We also find that on the point ..... 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