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TMI Blog2023 (5) TMI 297X X X X Extracts X X X X X X X X Extracts X X X X ..... enied to the Appellant - Order procurement itself means that they are canvassing and promoting the products of the Appellant. It is seen that the Adjudicating Authority has relied on the case law of COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD II VERSUS M/S CADILA HEALTH CARE LTD. [ 2013 (1) TMI 304 - GUJARAT HIGH COURT] - Adjudicating Authority has taken the view that since the incentive is paid @ 10% of the total sales, this incentive is paid only Sales Commission ignoring the fact that without canvassing and procuring the order the sales could not have taken place. Therefore the decision of Cadila Healthcare Ltd actually supports the case of the Appellant. The subsequent clarification given under Circular No. 943/4/2011-CX dt.29.04.2011 and addition of Explanation to the definition of BAS vide Notification No. 02/2016 dt.03.02.2016 shows the legislative intent that the assessee should not be deprived of the Cenvat Credit even when mere sales commission is paid where sales promotion may not be involved. The amended notification, in effect means that the Cenvat Credit would be eligible not only for the sales promotion services per se but also for commission paid on pure sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 of the impugned order ) 1,11,99,110 - 1,11,99,110 2 Credit denied on the ground that they are not having nexus with output (Refer Para 12.8 of impugned order) - - - i. Consulting Engineer 62,595 - 62,595 ii. Telecommunication 2,155 - 2,155 iii. Stockbroker 5,324 - 5,324 iv. Company Secretary/Chartered Accountant Services 1,041 - 1,041 v. Insurance Services 1,039 - 1,039 vi. Courier 308 - 308 3 Credit denied for not adducing evidence (Refer Para 14.1 of impugned order) - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble thereon. The Appellants have taken the Cenvat Credit on account of such invoices. He submits that basically Veljan has provided them the Service Tax of sales promotion only. However, the Adjudicating Authority has not gone through the documentary evidence and factual details placed before him and he has erroneously concluded that the activity undertaken by Veljan is that of pure Sales Commission agency service whereas in actual fact they were undertaking sales promotion activities. Without these activities being undertaken by Veljan, the Appellant would not have been in a position to export their products. The Adjudicating Authority, after holding that the activity amounted to pure sales commission and is not amounting to sales promotion, he relied upon the case law of CCE Ahmedabad-II vs Cadila Healthcare Ltd [2013 (30) STR 3 (Guj)] and confirmed the demand. The learned Consultant submits that as a matter of fact, this case law supports the Appellant as they have only received the sales promotion service from Veljan. (ii) As an alternate pleading, he submits that even if it is taken for a moment, though not admitting that the Adjudicating Authority is correct in classifyi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot take this opportunity properly and failed to submit any concrete evidence towards eligibility of Cenvat Credit in these cases. Therefore, he submits that the Adjudicating Authority was correct in confirming the demand of Cenvat Credit on these services. He submits that the details of contraventions came to light only on account of verification and investigation. Hence, he justifies the confirmed demand for the extended period. 8. Heard both sides and perused the documents. 9. We have gone through the extract of Agreement between the Appellant and Veljan extracted in the OIO which is reproduced below: Whereas the Manufacturer desired that the products manufactured by them are to be sold in large scale abroad for which it is desired to sell its products as indirect exports through the Buyer against the orders procured from the customers abroad and such indirect export transactions have started from March, 2000 and the Manufacturer has been paying to the Buyer an incentive upto 10% from the total sales effected in a financial year of the Manufacturer by way of indirect export as agreed between the parties and recorded in the Board Meeting of the Manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided by such commission agent would not fall within the purview of the main or inclusive part of the definition of input service as laid down in Rule 2(l) of the Rules. [emphasis supplied] 11. The Adjudicating Authority has taken the view that since the incentive is paid @ 10% of the total sales, this incentive is paid only Sales Commission ignoring the fact that without canvassing and procuring the order the sales could not have taken place. Therefore the decision of Cadila Healthcare Ltd actually supports the case of the Appellant. 12. The subsequent clarification given under Circular No. 943/4/2011-CX dt.29.04.2011 and addition of Explanation to the definition of BAS vide Notification No. 02/2016 dt.03.02.2016 shows the legislative intent that the assessee should not be deprived of the Cenvat Credit even when mere sales commission is paid where sales promotion may not be involved. The amended notification, in effect means that the Cenvat Credit would be eligible not only for the sales promotion services per se but also for commission paid on pure sales. 13. The Tribunal in the case of Essar Steel India Ltd vs CCE ST, Surat (cited supra) has gone into the issue a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Ahmedabad and needs to be set aside and I do so. The impugned order is set aside and the appeal is allowed with consequential relief, if any. [emphasis supplied] 15. Therefore, in any view of the matter as to whether the services rendered by Veljan are in the nature of Sales Promotion as claimed by the Appellant or are in the nature of mere sales on which commission was paid, as claimed by the Revenue, under both the cases the Cenvat Credit cannot be denied to the Appellant. The cited case laws are squarely applicable to the facts of the present case. Accordingly, we allow the Appeal in respect of the confirmed demand of Rs.1,11,99,110/- towards the Cenvat Credit taken on sales incentive paid by the Appellant. 16. In respect of CENVAT credit denied on account of credit taken for various services like consulting engineer, stock broker, etc., the factual details are required to be verified by the Adjudicating Authority to come to a conclusion as to whether the Appellant is eligible for CENVAT credit or not. This exercise cannot be taken up at the Tribunal level. Accordingly, we are remanding the matter to the Adjudicating Authority, in respect of the following confirm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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