TMI Blog2023 (2) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... m the demand, as sales commission is not covered in the inclusive part of the definition of Input Service. The Appellant rightly referred to Circular No. 943/4/2011-CX, dated 29.04.2011 wherein department unambiguously accepted the legality of availment of credit on sales commission - it was held that The definition of input services 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 same is linked to actual sale. Reading the provisions harmoniously it is clarified that credit is admissible on the services of sale of dutiable goods on commission basis. The sales commission has a direct n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (ICF) etc.. The goods manufactured by the Appellant fall under Chapter 86 as well as Chapter 39 depending upon the usage as well as classification criteria. The procurement of purchase orders from the buyers is the pre-condition for manufacture of such tailor made goods. Show Cause Notice dated 31.03.2016 was issued alleging contravention of the provisions of Rule 3(i) read with Rule 2(l) of the CENVAT Credit Rules, 2004. It is the case of the Department that the assessee during the period from 01.04.2011 to 31.03.2015 irregularly availed input service credit to the tune of Rs.7,99,328/-, on services of Sales Commission, which did not qualify as input service of the Service Tax paid on Commission paid to different commission agents such a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit services, resolution of any disagreements or disputes, expediting the interests of the Appellants and various other allied services in the interest of the Appellant. Against such services received from the commission agents, the Appellants pays commission charges to the said agents against issuance of invoices by the said agents, whereby the said agents also charge Service Tax at the applicable rate. The flow chart of manufacture operation in context of the agents, details of commission paid and bills of commission have already been submitted. Further, they have also submitted the appointment letters and various communications made with the commission agents. Ld.Advocate relied upon various case laws in support of his submissions. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activities related to business ? CLARIFICATION : The definition of input services 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 same is linked to actual sale. Reading the provisions harmoniously it is clarified that credit is admissible on the services of sale of dutiable goods on commission basis. 6.2. Department inserted an explanation to definition of input service under Rule 2(I) of the Cenvat Credit Rules, 2004. Sales promotion is a valid service to avail and it is covered in the inclusive part of the definition of input service. It is a settled position of law that explanatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se the manufacturing activity an encouragement is being given by way of sales commission for achieving increased sales. 8. I also observe that the Hon ble High Court of Punjab Haryana in the case of Commissioner of Central Excise, Ludhiana Vs. Ambika Overseas : 2012 (25) STR 348 ( P H), had clearly held that the sale and manufacture are directed inter-related and the commission paid on sales needs to be accounted for as services related to sales promotion. Further, I follow the ratio of the decision of the Division Bench of this Tribunal in the case of Essar Steel India Ltd. cited supra, wherein the Tribunal, after discussing all the previous cases and Rules of interpretation, have held that the Explanation inserted in Rule 2 (l) o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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