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TMI Blog2022 (1) TMI 390X X X X Extracts X X X X X X X X Extracts X X X X ..... he insertion of this explanation. Relying on this order of the Tribunal, the Assistant Commissioner has dropped the show-cause notice and allowed CENVAT credit to the appellant. The Commissioner (Appeals) has not given any reason as to why the order of the Tribunal Ahmedabad in the case of Essar Steels does not apply to this case. In fact, he did not discuss the order of the Essar steels India Ltd at all. In other words while the Assistant Commissioner has followed the ratio of the law laid down in the case of Essar Steel by a Division Bench of the Tribunal, Learned Commissioner (Appeals) has simply ignored it and gave his own reasoning. The ratio of the order of the Tribunal is binding on all the lower authorities. Appeal allowed - d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s explanation has retrospective effect and applies even to cases prior to the insertion of this explanation. Relying on this order of the Tribunal, the Assistant Commissioner has dropped the show-cause notice and allowed CENVAT credit to the appellant. 4. Paragraphs 23 24 of the order of the Assistant Commissioner were as follows:- 23. In this regard I observe that Hon ble CESTAT, Ahmedabad, in the similar issue of cenvat credit of sales commission in the case of Essar Steel India Ltd., Vs CCE of Surat-I[2016(42)STR 869(Tri-Ahmd)] has held that An explanation inserted in a Section/Rule, is generally to explain the meaning of the words contained in the Section/Rules. The purpose of Explanation is to explain the meaning and intendme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ble Supreme Court in the case of Vatika Township Pvt Ltd (supra), in the identical situation, held that if a legislation confers a benefit on some other person or on the public generally, and where to confer such benefit appears to have been the legislature s object, then the presumption would be that such a legislation giving it a purposive construction, would warrant it to be given a retrospective effect. The relevant portion of the decision in the case of Vatika Township Pvt Ltd (supra) is reproduced below:- We would also like to point out, for the sake of completeness, that where a benefit is conferred by a legislation, the rule against retrospective construction is different. If a legislation confers a benefit on some persons bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gn agents. The board in its instructions issued from time to time as discussed supra, has maintained that sales promotion has indeed include sales on commission basis. Further, the most important development is the explanation inserted in Cenvat Credit Rules, to state that sales promotion includes sales commission. Though it was done subsequently, due the judgment of the CESTAT, in the similar issue and various decisions of the Apex Court where the similar clarifications were considered as having retrospective effect as discussed above, I am of the opinion that the explanation applies retrospectively and cover the period in dispute in this notice. Thus, these reasons propel me to conclude that the services of foreign agents qualify as input ..... X X X X Extracts X X X X X X X X Extracts X X X X
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