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2019 (8) TMI 957 - AT - Central ExciseCENVAT Credit - input services - commission paid to the Del Credere Agent - case of Department is that the services provided by the Del Credere Agent are utilized by the Appellants for post removal activities and as such they are not covered within the definition of ‘input service’ - HELD THAT:- It is clear that the Del Credere Agents are evaluating the prospective customers and also guarantee the collection for the dues. As per the agreement, the Del Credere Agent at its own cost and expenses appoint subagents/ employees, wherever required, for the business of the Appellant and for canvassing upto date information of the existing and anticipated buyers with whom the Appellant has dealt or intend to deal. The agreements further provides that the Del Credere Agent will be solely responsible for guaranteeing the solvency of the buyers and will effectively guarantee for the value of bad doubtful debts arising out of such sales made by them and as such will guarantee to compensate the whole amount of doubtful recovery within the normal credit period assigned by them. A reading of the agreement between Appellant and Del Credere Agent would establish that it is related to the sales promotion. Only because some clause of the agreement mentioned that they won’t provide any guarantee where the recoveries are held up due to poor quality or quantity of the product supplied by them, does not take it outside the purview of Business Auxiliary Service and in view of that it cannot be said that the services of the Del Credere Agents were exclusively utilized by the appellants for post removal activities only. If that is the situation then it can very well said to be the input service as per Rule 2(l) ibid. Reference made to the Tribunal in JODHANI PAPERS LTD. VERSUS COMMISSIONER OF C. EX., BANGALORE-II [2015 (10) TMI 51 - CESTAT BANGALORE] where it was held that the words ‘upto the place of removal’ has been used only in respect of ‘few input services’ in the definition under Rule 2(l) and this restrictive clause cannot be applied to all the cases. The services provided by Del Credere Agents is Business Auxiliary Service and the same is for the promotion of the business of the Appellant and therefore it is an ‘input service’. The Appellant is therefore entitled for Cenvat Credit and the impugned order is liable to be set aside - appeal allowed - decided in favor of appellant.
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