At, Customs Excise Service Tax Appellate Tribunal West Zonal Bench At Mumbai
By, THE HONORABLE JUSTICE: RAJU
For Petitioner : H.M. Dixit, Asst. Comm. (A.R.) And For Respondents: Prashant Patankar, Consultant
1. These two appeals are filed by the Revenue. The issue in both the appeals is common though two different impugned orders are there, but the findings are identical. Ld. AR contended that the respondents had availed Cenvat Credit of service tax paid on sales commission under the category of Business Auxiliary Service (BAS). Ld. AR observed that the Commissioner (Appeals) has not followed the decision of the Hon'ble High Court of Gujarat in the case of Cadila Healthcare : 2013 (30) STR 3 (Guj) . Ld. AR argued that the observation of the Commissioner (Appeals) that the decision of the Hon'ble High Court in the case of Ultratech Cement Ltd. would prevail over the judgement in M/s. Cadila Healthcare is not legal and proper, as the decision in the case of M/s. Cadila Healthcare is precisely on the issue of sales commission. This is specifically issued while the decision of Hon'ble High Court in the case of Ultratech Cement Ltd. is in respect of different service.
1.1 Ld. AR relied on the impugned order. He further pointed out that the decision of Hon'ble Punjab & Haryana High Court in the case of Ambika Overseas : 2012 (25) STR 348 (P&H) is squarely in their favour and is only identical issue.
2. I have gone through the rival submissions. I find that while revenue is relying on the decision of the Hon'ble High Court of Gujarat in the case of Cadila Healthcare (supra), the appellants are relying on the decision of Hon'ble Punjab & Haryana High Court in the case of Ambika Overseas (supra). After examining both these decisions, the Tribunal in the case of Birla Corporation : 2014 (35) STR 977 (Tri-Del) has come to the following conclusion:
8. Rule 2 (l) of Cenvat Credit Rules, 2004 was amended w.e.f. 1.4.2011 and by this amendment, the expression "activities related to business" in the inclusive portion of the definition of 'input service' was excluded. However, the expression "advertisement or sales promotion" was retained. The Board vide Circulardated 29.4.2011 (S.No. 5 of the Table) in respect of the question "Is the credit of Business Auxiliary Service (BAS) on account of sales commission now disallowed after the deleted of expression "activities related to business", clarified as under "The definition of input service allows all credit on services used for clearance of final products upto the place of removal. Moreover, activity of sale promotion is specifically allowed and on many occasions, the remuneration for the same is linked to actual sale. Reading the provision harmoniously, it is clarified that credit is admissible on the services of sale of dutiable goods on commission basis."
Thus according to this circular, the service of commission agents (Business Auxiliary Service) is covered by the term "advertisement or sales promotion". In my view, there is nothing in this circular which is contrary to the provisions of law and hence the same would be binding
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on the Departmental officers. Thus, in view of this circular also, though it is in respect of definition of "input service" during period w.e.f. 1.4.2011, commission agents service would be cenvatable as the term "advertisement and sale promotion" was there in the definition of input service even during period prior to 1.4.2011.