TMI Blog2013 (5) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... re registry, and security". Thus none of the illustrative activities, viz., "accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security" is in any manner similar to the services rendered by commission agents nor are the same in any manner related to such services. Under the circumstances, though the business activities mentioned in the definition are not exhaustive, the service rendered by the commission agents not being analogous to the activities mentioned in the definition, would not fall within the ambit of the expression "activities relating to business". Consequently, CENVAT credit would not be admissible - No distinction can be made between the commission paid to the foreign agent and the agents operating within the territory of India because nature of services provided by both the categories of the agents are same - against assessee. - E/936/11 - A/10339/WZB/AHD/2013 - Dated:- 1-3-2013 - H K Thakur, J. For the Appellant : Shri P N Sarvaiya , AR For the Respondent : Shri Suryanarayanan , Adv. Per: H K Thakur : 1. This appeal has been filed by the department ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person who acts on behalf of another person and causes sale or purchase of goods. In other words, he is directly responsible for selling or purchasing on behalf of another person and that such activity cannot be considered as sales promotion. According to the Adjudicating Authority there is a clear distinction between sales promotion and sale. A commission agent is directly concerned with sales rather than sales promotion. He accordingly, held that service provided by commission agent does not fall within the purview of the main or inclusive part of the definition of input service as laid down in rule 2(l) of the Rules and therefore, the assessee was not eligible for CENVAT credit in respect of the service tax paid on commission paid to foreign agents. (ii) The Tribunal has held that foreign commission agent service is in the nature of sales promotion and without any elaborate discussion in respect thereof has held that CENVAT credit was admissible on service tax paid in respect of such service. The Tribunal while reversing the findings recorded by the Adjudicating Authority has not given any reasons in support thereof and has merely placed reliance upon its findings in relati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned under section 65(19) of the Finance Act, 1994, which to the extent the same is relevant for the present purpose reads thus: Business Auxiliary service" means any service in relation to, - (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or promotion or marketing of service provided on behalf of the client; or and includes services as a commission agent but does not include any information technology service and any activity that amounts to manufacture within the meaning of clause(f) of section 2 of Central Excise Act, 1944 Explanation - For the removal of doubts, it is hereby declared that for the purposes of this clause. - (a) "commission Agent" means any person who acts on behalf of another person and causes sale or purchase of goods, or provision or receipt of services, for a consideration, and includes any person who, while acting on behalf of another person (i) deals with goods or services or documents of title to such goods or services; or (ii) collects payment of sale price of such goods or services; or (iii) guarantees for collection or payment for such goods; or (iv) undertakes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... targeted. Such activities relate to promotion of sales in general to the consumers at large and are more in the nature of the activities referred to in the preceding paragraph. 'Commission agent" has been defined under the explanation to "business auxiliary service and insofar as the same is relevant for the present purpose means any person who acts on behalf of another person and causes 'sale or purchase' of goods, or provision or receipt of services for a consideration. Thus, the commission agent merely acts as an agent of the principal for sale of goods and such sales are directly made by the commission agent to the consumer. In the present case, it is the case of the assessee that service tax had been paid on commission paid to the commission agent for sale of final product. However, there is nothing to indicate that such commission agents were actually involved in any sales promotion activities as envisaged under the said expression. The term input service as defined in the rules means any service used by a provider of taxable service for providing an output service or used by the manufacturer whether directly or indirectly in or in relation to the manufacture of final produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicate that what are mentioned thereafter are only illustrative and not exhaustive. Thus, the activities that follow the words "such as" are illustrative of the activities relating to business which are included in the definition of input service and are not exhaustive. Therefore, activities relating to business could also be other than the activities mentioned in the sub-rule. However, that does not mean that every activity related to the business of the assessee would fall within the inclusive part of the definition. For an activity related to the business, it has to be an activity which is analogous to the activities mentioned after the words "such as". What follows the words "such as" is "accounting, auditing, financing, recruitment and quality control, coaching and training computer networking, credit rating, share registry, and security'. Thus, what is required to be examined is as to whether the service rendered by commission agents can be said to be an activity which is analogous to any of the said activities. The activity of commission agent, therefore, should bear some similarity to the illustrative activities. In the opinion of this court, none of the illustrative activi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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