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2020 (11) TMI 893 - AT - Central ExciseCENVAT Credit - input services - sales commission paid to sister concern - outward transportation from factory to the buyers premises for the period from April 2008 to April 2010 - HELD THAT:- As per clause (3) of the Agreement entered into between the appellant and FMGIL, FMGIL promotes sale of products of the appellant by doing various activities including promotion and marketing of the products of the appellant, seeking orders, assistance in sale of products, maintaining good relations with customers, providing consultation and advice in relation to the above, receiving orders from customers in relation to the products, notifying the customers/prospective customers of all the terms and conditions of sale as determined by the appellants. Further, the input service as defined under Rule 2(l) of CENVAT Credit Rules, 2004 explicitly includes activity of sales promotion and the explanation to Rule 2(l) of CENVAT Credit Rules, 2004 inserted by Notification No.2/2016- CE(NT) dated 3.2.2016 holding that sales promotion includes services by way of sale of dutiable goods on commission basis - also, this explanation added by way of amendment is declaratory in nature and is applicable retrospectively. The Board vide Circular No.96/85/2015-CX dated 7.2.2015 has clarified that decision in the case of COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD – II VERSUS M/S CADILA HEALTH CARE LTD. [2013 (1) TMI 304 - GUJARAT HIGH COURT] applies in case where the agent is undertaking only sales and no sales promotion. Whereas in the present case, it is clearly evident from various terms and conditions contained in clause (3) of the Agreement that M/s. FMGIL undertakes the activity of sales promotion. Hence, we hold that the decision in the case of Cadila Healthcare Ltd. is not applicable in the present case. This issue is no more res integra and it has been consistently held that sales commission fall under definition of ‘input service’. By following the ratio of the above said decisions, the denial of CENVAT Credit on sales commission is not sustainable in law. Time Limitation - CENVAT credit on outward transportation from factory to the customers’ premises - HELD THAT:- On the point of limitation, the Division Bench of this Tribunal in the case of M/S SANGHI INDUSTRIES LTD. VERSUS C.C.E. KUTCH (GANDHIDHAM) [2019 (2) TMI 1488 - CESTAT AHMEDABAD], the Division Bench has dealt with the issue of limitation and has held that the outward GTA was the matter under litigation and for that reason the Government has to come out with clarification thereafter the matter was subject to various litigation before Tribunal, Hon’ble High Courts and Hon’ble Supreme Court, therefore no malafide intention can be attributed to the appellant, therefore, wherever the demand is for extended period, the same will also not be sustainable on the ground of time bar also. Appeal disposed off.
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