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2016 (3) TMI 780 - AT - Central ExciseCenvat credit of input services - denial of claim as its cost is included in the cost of production, on the ground that the same was availed outside the factory premises - utilization of credit on reverse charge mechanism - Held that:- Explanation to Rule 3 (4) of Cenvat Credit Rules, 2004 amended in 2012 imposed a bar on utilization of credit on reverse charge mechanism and the period involved in the present appeal is prior to the amendment. In the instant case, the goods cleared from the appellant’s premises were sent to M/s. Wuxi Sumisho Hi-Tech Logistics Company Limited, China and from there it is re-packed and sent to the ultimate buyers. M/s. Wuxi Sumisho Hi-Tech Logistics Company Limited is not the buyer. They procure orders from the potential buyers and asks the appellant to send the goods to them for onward supply to the ultimate buyers. Even after the goods are supplied to the buyers, M/s. Wuxi Sumisho Hi-Tech Logistics Company Limited does the maintenance job of the products sent by the appellant. Both the parties entered in to a contract and the warehouse of the commission agent viz., M/s. Wuxi Sumisho Hi-Tech Logistics Company Limited, China is the place of removal in the instant case. In such cases, the credit of the service tax paid up for such services would be admissible. In the case of CCE, Vapi Vs. Nilkamal Crates & Bins (2010 (2) TMI 232 - CESTAT, AHMEDABAD ), co-ordinate Bench of this Tribunal held that commission agent service is to help in promotion of business activity and thus credit is admissible on input services used in relation to it. Thus the appellant is entitled to the benefit of Cenvat credit availed on BAS service used in relation to its business activity in a foreign land. Since, the demand is set aside, the impugned penalty is also not sustainable. - Decided in favour of assesee
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