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2019 (3) TMI 1992 - AT - Service TaxCENVAT Credit - input services - sales commission paid to their sale agents - difference of opinion of different courts on the issue - HELD THAT:- The Hon’ble High Court Gujarat in ASTIK DYESTUFF PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE AND CUSTOMS [2014 (1) TMI 776 - GUJARAT HIGH COURT] has relied upon COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD – II VERSUS M/S CADILA HEALTH CARE LTD. [2013 (1) TMI 304 - GUJARAT HIGH COURT] however Hon’ble High Court of Punjab and Haryana in the case COMMISSIONER OF CENTRAL EXCISE, LUDHIANA VERSUS AMBIKA OVERSEAS [2011 (7) TMI 980 - PUNJAB & HARYANA HIGH COURT] had given a contradictory decision - It is thereafter that the matter was referred to Hon’ble Supreme Court. Subsequent thereto there has been a CBEC Circular No. 934/4/2011 dated 29.04.2011 vide which the scope of sales promotion activities as mentioned in explanation to Rule 2(l) of Cenvat Credit Rules, 2004 (as was inserted vide Notification No. 2/2016 dated 03.02.2016) was considered. The said clarificatory Circular was issued by the Department with a view to resolve the confusion prevalent due to the different views of the different High Courts - It was clarified therein that an explanation inserted in a Section/ Rule is generally to explain the meaning and intendments of the said Section/ Rule. Sometimes when the explanation is inserted to clarify a doubtful point of law it would be effectively retrospective in nature. While relying upon the said Circular, this Tribunal in M/S ESSAR STEEL INDIA LTD. VERSUS COMMISSIONER OF C. EX. & SERVICE TAX, SURAT-I [2016 (4) TMI 232 - CESTAT AHMEDABAD] case has held the Commission paid to the agents is a sales promotion activity. Keeping in view the same and the fact that the matter is still subjudice before the Apex Court, due to the contrary decisions from two different High Courts, but that the Department has subsequently tried to resolve the confusion, Order is hereby set aside - Appeal dismissed.
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