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2014 (1) TMI 1662 - AT - Service TaxDenial of CENVAT Credit - Commission agent - whether in this case the agents have undertaken sales promotion activity or not - Held that:- Canvassing and procuring order were in relation to sales promotion and would fall under sales promotion activity. Further the Hon’ble High Court also upheld the view taken that these activities cannot be considered as post-removal activity and have to be treated as pre-removal activities. At this juncture it has to be noted that one of the main grounds taken for rejecting the claim of the appellant for CENVAT credit is that the activity of the commission agents is post-removal and if the activity is post-removal, credit is not admissible. CA relied upon the letter written by one of the two agents namely Agnes Bruno Ltd. dated February 15th 2007. In this letter, Agnes Bruno Ltd. had informed the appellant that they lend a helping hand to the Business Houses to sell their products. They undertake canvassing of business not only to retain the existing clientele of the company but to find new customers as well. They also stated that the appellant could take the best advantage of their network available throughout the country to sell their bulk products viz., Liquid Gases on commission basis. They also gave details of Registration, Income Tax, Sales tax, Service Tax, Balance Sheet etc. This would show that even though the invoice which speaks particularly sales commission, taking note of the letter of the agent that they would help in selling the products, in canvassing business and make their network available for expanding the business, in my opinion this is nothing but sales promotion. In respect of another agent namely SPS Metal Cast & Alloys Ltd., the appellant could not show any letter or agreement. - in respect of both the agents, the appellants have been able to show that the agents not only act as commission agents but also undertake sales promotion. Therefore I consider that appellants have made out a case on merits in respect of the eligibility for CENVAT credit. - Decided in favour of assessee.
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