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TMI Blog2021 (8) TMI 1112X X X X Extracts X X X X X X X X Extracts X X X X ..... OK JINDAL, MEMBER (JUDICIAL) Shri Mukesh Dokania, DGM and Shri Deepak Kumar Sr. Manager for the Appellant Ms. Geetika, Authorised Representative for the Respondent ORDER The appellant is in appeal against the impugned order for denial of cenvat credit on financial incentive/commission paid to various Financial Institutions. 2. The brief facts of the case are that the appellant is a manufacture of motor vehicles and accessories thereof. The appellant is having the factories are various locations and having ISD registration on distributing the cenvat credit to various divisions. The appellant also having Sales Offices and Spare Parts Divisions across the country and this case pertain to the Palwal Division (Haryana). One Tata Motor Finance Ltd,, Finance and Mahindra Mahindra Financial were issuing invoices to recover 'Finance incentive/Commission' from the appellant, which according to the appellant was payment towards services of Financing/Sales Promotion provided to the appellant. The said input Service Distributor had distributed the cenvat credit of service tax charged by these Finance companies, to their manufacturing/spare parts division' un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iate financial packages for them M/s Chola would undertake effective and appropriate promotional activities in respect of its competitive and innovative schemes and packages for financing Appellants vehicles. To undertake various sales and promotional activities at Dealer locations, Chola branches, etc. M/s Chola would display various promotional materials sent by Appellants in its branches Service Levels: M/s Chola will process customer s requests normally within six working days after receipt of duly completed application forms with the necessary supporting documents M/s Chola branches will arrange for collection of loan applications from the dealership The identified resource persons at branches will visit the dealership at least once every day in order to ensure service levels and proper relationship management with the dealer. 5. It is his submission that the inclusive part of the definition of Input service under Rule 2 (l) of the Cenvat Credit Rules, 2004 (in short said Rules ) makes it clear that credit of service tax paid on Advertisement sales promotion activity is admissible to the Appellants. The very object of the Cenvat Scheme is to allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hase of vehicles is also one of the modes of financial management and is directly linked with the manufacturing activity. It is also to be submitted that arranging loans to prospective customers is directly linked to enhancing the sales of the product which is related to clearance of manufactured product. Excise duty is on manufacture and paid at the time of clearance from the factory. For ensuring that the manufactured goods have a market, they have to ensure that the prospective customers are in a position to buy the excisable goods cleared by the manufacturer i.e. the manufacturer has to ensure that there is a demand in the market for the goods. Unless there is a demand in the market, the manufacturer cannot clear excisable goods on payment of duty. Demand signifies the ability and willingness to buy a particular commodity at a given point of time, assuming other variables remain constant. Utility preferences and choices underlying demand can be represented as functions of cost, benefit, odds and other variables. In this case, the FIs arranges loan to the prospective customers so as to ensure that the customers purchase the excisable goods manufactured and cleared by the manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been provided outside the place of removal. And therefore it is not admissible for cenvat credit as provided under rule 2(l) of Cenvat Credit Rules, 2004. 11. Further, it is submitted that explanation tendered by the appellant that the appellant has received services from NBFC in relation to Finances business promotion and that the finance companies were issuing invoices to TML is devoid of any legal arrangement and thus not acceptable in the eyes of law. Appellant has failed to bring on record any document which is legally admissible to substantiate that services were received by the appellant from NBFC and that the service tax paid on such services would be admissible as cenvat credit. The only document submitted by the appellant is the MOU signed between appellant and cholamandalam, a NBFC and that too, is silent on the aspect of consideration / any fixed mechanism for consideration , tendering it void. Thus in absence of any legal documentary evidence that service received(if at all) by the appellant from NBFC is in nature of input service as contemplated under rule 2(l) of CCR,2004 , the appeal may be dismissed in the interest of justice. 12. Heard the parties and con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tering, beauty treatment, health services, cosmetic and plastic surgery, membership of a club, health and fitness centre, life insurance, health insurance and travel benefits extended to employees on vacation such as Leave or Home Travel Concession, when such services are used primarily for personal use or consumption of any employee;] [Explanation. - For the purpose of this clause, sales promotion includes services by way of sale of dutiable goods on commission basis.] 15. On going through the above provisions as well as the facts of the case, the appellant is paying commission to the financers for selling their vehicles to various prospective buyers on the vehicles manufactured by the appellant. If these financers do not finance the vehicles manufactured by the appellant, the vehicles of the appellant are not able to be sold in the open market freely. Therefore, these financers are indirectly providing the services of sales promotion to the appellant. Sales promotion is inclusive part of the definition and the same can be availed beyond the place of removal as there is no bar on the same in the definition itself. 16. Further, I find that in case of TVS Motor Company ..... X X X X Extracts X X X X X X X X Extracts X X X X
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