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2015 (8) TMI 21 - AT - Central ExciseDenial of CENVAT Credit - input services - whether distributors/ consignment stockists of the appellant are doing any sales promotion activities in addition to selling of goods of the appellant or not - Held that:- Sales promotion activities are carried out as per Clause 13 and 17 of the contract entered between the appellant and the distributors/ consignment stockists. That their case is squarely covered by the judgment in the case CCE, Ahmedabad vs. Cadila Healthcare Limited (2013 (1) TMI 304 - GUJARAT HIGH COURT). On the other hand, Revenue is of the view that no sales promotion activities are undertaken by the distributors/ consignment stockists of the appellant and therefore, no CENVAT credit is admissible as per law laid down by the Hon'ble Gujarat High Court in the case of CCE, Ahmedabad-II vs. Cadila Healthcare Limited. - activities undertaken by the distributors/ consignment stockists of the appellant are purely distribution/ sales and has no element of sales promotion and, therefore, CENVAT credit taken with respect to commission paid to such distributors/ consignment stockists is not admissible. The credit so taken is required to be paid by the appellant with interest and appeal with respect to CENVAT credit on services of Sales Commission, availed by the appellant, is rejected. So far as imposition of penalties upon the appellant is concerned, it is observed that the period involved in the present proceedings is from July 2012 to March 2013. The judgment delivered by Hon'ble Gujarat High Court in the case of Cadila Healthcare Limited vs. CCE Ahmedabad (2013 (1) TMI 304 - GUJARAT HIGH COURT) is dated 07.11.2012 which settled the dispute of interpretation of admissibility of CENVAT credit, inter-alia, with respect to sales commission paid by the assessees. As the issue involved was disputable, therefore, no penalty under Rule 15(1) of the Cenvat Credit Rules, 2004 is imposable. The appeal filed by the appellant with respect to penalty is thus required to be allowed. - Decided partly in favour of assessee.
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