Custom, Excise & Service Tax Tribunal
Cce, Ludhniana vs M/S Forgings & Chemicals Industries on 8 March, 2013
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No.2, R. K. Puram, New Delhi. Court No. 1 Date of hearing/decision: 08.03.2013 1. Whether Press Reporters 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 the 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 Excise Appeal No. 4008 of 2010-SM (Arising out of order-in-appeal No. 216/CE/LDH/2010 dated 31.08.2010 passed by the Commissioner (Appeals), Customs & Central Excise, Chandigarh). CCE, Ludhniana Appellants Vs. M/s Forgings & Chemicals Industries Respondent
Present Ms. Shweta Bector, DR for the appellant.
None for the respondent.
Coram: Honble Sh. Rakesh Kumar, Member (Technical) Final Order No.55759/2013 Per: Rakesh Kumar:
The only issue involved in this case as to whether the appellant are eligible for cenvat credit of service tax on commission paid to overseas commission agents for procuring export orders for them. The department being of the view that this service i.e. Business Auxiliary Service, received from the commission agents abroad is not input service, issued three show cause notices for denial of cenvat credit amounting to Rs.4,35,484/-, Rs. 40,363/- and Rs.1,25,739/- alongwith interest and also for imposition of penalty. These show cause notices were adjudicated by the Deputy Commissioner vide order-in-original dated 03.02.2010 by which the above mentioned cenvat credit demands were confirmed alongwith interest and penalty of Rs. 10,000/- each was imposed. On appeal to Commissioner (Appeals), the above order of the Deputy Commissioner was set aside by order dated 31.08.2010. The Commissioner (Appeals) in this order held that the Business Auxiliary Service of procuring export orders received by the appellant from overseas commission agents has to be treated as an input services, as the definition of input service is to be interpreted in the light of requirement of business and it cannot be read restrictively so as to confine it only upto factory or upto the depot of the manufacturer. Against this order of the Commissioner (Appeals) this appeal has been filed by the Revenue.
2. None appeared for the respondent though a notice for hearing has been issued to them. In view of this, so far as the Respondent are concerned the matter is being decided ex-parte.
3. Heard the Ms. Shweta Bector, ld. DR who assailed the impugned order reiterating the grounds of appeal and pleaded that the service of commission agents located abroad for procuring export order or received by the appellant agent has no nexus with the manufacturer of final product and hence the same cannot be treated as input service and as such Commissioner (Appeals)s order on this point is incorrect.
4. I have carefully considered the submissions of the ld. DR and have gone through the records of this case. The appellant have received Business Auxiliary Service of commission agents from overseas commission agents who procured the export orders for them and in respect of this service received from the commission agent they paid the service tax under Section 66A as service recipient on the amount of commission paid by them to overseas commission agents. The point of the dispute was to whether the appellant are eligible for cenvat credit in respect of service received from the overseas commission agents. The definition of input service during the period of dispute covered the activities of advertisement or sales promotion and also the activities related to business. The service of procuring export order is obviously, the service of marketing and sales promotion. It is also an activity related to the manufacturing business of the appellant, I, therefore, hold that the service of procuring export orders received by the appellant from the overseas commission agents is covered by definition of input service and the respondent are eligible for cenvat credit. The Commissioner (Appeals) has rightly held that the definition of input service has to be interpreted in the light of the requirement of the business and it cannot be read restrictively so as to confine only upto the factory or upto the depot of the manufacture. I, therefore, do not find any infirmity in the impugned order. The Revenues appeal is dismissed.
(Rakesh Kumar) Member (Technical) Pant 3