Custom, Excise & Service Tax Tribunal
Yes vs Represented By : Shri G P Thomas (Ar) on 18 July, 2014
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, Ahmedabad COURT Appeal No. : E/854/2011 Arising out of : OIA No.BC/64/SURAT-II/2011 dt 12.4.2011 Passed by : The Commissioner (A), CCE&ST, Surat II For approval and signature : Mr. M.V. Ravindran, Hon.'ble Member (Judicial) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes Appellant (s) : CCE&ST., Surat II Represented by : Shri G P Thomas (AR) Respondent (s) : M/s Shree Kamrej Vibhag Khand
Udyog Sahakari Mandli Ltd Represented by : 1. Shri Rahul Gajera (Adv)
2. Shri J C Patel (Adv.) CORAM :
Mr. M.V. Ravindran, Hon.'ble Member (Judicial) Date of Hearing : 27.6.2014 Date of Decision : 18.7.2014 ORDER No. A/11385/2014 dtd 18/7/2014 Per : Mr. M.V. Ravindran;
This appeal is filed by the Revenue against OIA No.BC/64/SURAT-II/2011 dt 12.4.2011.
2. The revenue is aggrieved by the impugned order on the ground that the first appellate authority has allowed the Cenvat Credit of the service tax paid on Business Auxiliary Services on sales commission paid by the appellant for selling/marketing of their finished goods during the period June 2008 March 2009.
3. Heard both sides and perused the records.
4. Ld Counsel appearing for the respondent raised preliminary objections and submits that authorisation to file appeal does not bear any date. On perusal of documents, I find that the said authorisation bears signature of one of the commissioners with a date on it. In my view the preliminary objections raised by the Ld counsel is incorrect and needs to be rejected and I do so.
5. On the merits, I find the first appellate authority has allowed the appeal filed by the appellant by recording the following findings.
I have carefully gone through the facts of the case, appeal memorandum and submission made at the time of personal hearing. As per the provisions of Rule 2(1) of the Cenvat Credit Rules 2004 Input Service means any taxable service, used by the manufacturer, whether directly or indirectly, in or in relation to manufacturer of final product. I find that the definition of input service the words sales promotion has been included. I find that the appellant sold their finished goods through Commission Agents and the Commission agents charged commission for sale of the goods to the customer and paid service tax on such commission. The appellant has also produced Chartered Accountant certificate that brokers or agents are paid their commission amount separately. It clearly shows that the commission has been given for promoting the sale of the finished excisable goods of the appellant. Therefore the said service is definitely an input service of the appellant. Therefore the said service definitely an input service of the appellant. The issue is no res integra as the specific issue of credit of service tax paid on sales commission agents has been allowed in case of Lanco Industries Ltd vs. CCE Tirupati 201(17)STR 350 9 (Tri. Bang.); CCE Raipur vs HEG Ltd 2010(18) STR 446(Trii Del)) and host of ogher cases.
7. It can be seen from the above reproduced paragraph that the first appellate authority has relied upon a chartered accountants certificate which clearly shows the commission which has been paid by the appellant is for promoting the sale of finished goods. As against such a categorical findings on the facts of the case, I find that the Revenue appeal has not adduced any contrary evidence. The entire grounds of the appeal of the Revenue is basically trying to interpret the provisions of the Rule 2(l ) of the Cenvat Credit Rules 2004, to drive home a point; that the sales promotion and such other activities are related sales commission service and do not qualify for as an Input Service. Revenue has placed reliance on the judgment of the Honble High Court of Gujarat in the case of Cadila Health Care Ltd 2013(30)STR 3 (Guj) of the judgement leadership, I find that the lordship have categorically held that the Cenvat Credit on the service tax paid on the sales commission is per-se is not allowed but if the said commission is paid for promotion, that would be a different. The factual matrix is recorded by the first appellate authority indicates that the amount paid by the appellant is a commission for sales promotion expenses.
7. In my view, the judgment of the Honble High Court of Gujarat in the Cadila Healthcare Ltd (Supra) would cover the issue in favour of the assessee.
8. I do not find any merits in the appeal filed by the Revenue. Accordingly, I upheld the impugned order as correct and legal and do not suffer from any infirmity.
9. Appeal is rejected.
(Pronounced in the Court on 18.7.2014) (M.V. Ravindran) Member (Judicial) swami ??
??
??
??
2