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2024 (1) TMI 982 - AT - Central ExciseInput Tax Credit - Eligibility for Service Tax credit - commission paid to its directors, as per the company’s board resolution - case of the Revenue is that the commission paid to directors is nothing but a commission paid to commission agent, hence the credit is not available to the appellant - HELD THAT:- From Circular No. 115/9/2009-ST dated 31.07.2009, it was categorically clarified that even if any amount paid to the director as a commission, the said amount paid by a company to their directors is not commission within the scope of ‘Business Auxiliary Services’. With this clarification also, it is clear that payment made to directors even under the nomenclature of commission, the same is not the commission classifiable under ‘Business Auxiliary Services’. Therefore, in our view the said commission is part of remuneration paid to the directors, hence not a sales commission. Accordingly, the same is eligible for Cenvat Credit to the appellant. This issue has been elaborately considered by this Tribunal in the case of M/S. RANE BRAKE LINING LTD. VERSUS COMMISSIONER OF GST & CENTRAL EXCISE [2018 (7) TMI 611 - CESTAT CHENNAI], wherein the Tribunal has held that it is the duty of the director to attend the meetings and therefore the service tax paid on such fees is eligible for credit. Thus, the appellant is legally entitled for the Cenvat credit in respect of the Service Tax paid on commission paid to the directors - the impugned order is set aside - appeal allowed.
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