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Monarch Catalyst Pvt. Ltd. Versus Commissioner of Central Excise, Thane-I

Entitlement to cenvat credit in respect of service tax paid to the commission agents based abroad - can the services rendered by the foreign based commission agent be stated to be input services within the meaning of such expression as defined under Rule 2(l) of the Cenvat Credit Rules, 2004? - Held that:- We find that as per Notification 41/2007-ST dated 6.10.2007 as superseded by Notification 18/2009-ST dated 7.7.2009, the appellant has an option either to avail cenvat credit or to claim refun .....

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to show that the appellant has suppressed the material facts with intent to evade duty. On the other hand, the appellant has placed on record two audit reports conducted by the department, wherein certain other objections were raised, but this issue was never raised which is sought to be raised now by the present show cause notice dated 27.4.2011 for the period from April 2006 to June 2009 by invoking the extended period of limitation. Further, the appellant has been disclosing the payment of co .....

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tting aside the impugned order with consequential relief, if any. - Decided in favour of assessee - APPEAL No. E/86768/13-Mum - Final Order No. A/85241/2016-WZB/EB - Dated:- 5-1-2016 - MR. P.S. PRUTHI, MEMBER (TECHNICAL) AND MR. S.S. GARG, MEMBER (JUDICIAL) For the Petitioner : Shri C. Subba Reddy, Advocate For the Respondent : Shri H.M. Dixit, Assistant Commissioner (AR) ORDER PER: S.S. GARG This appeal is directed against order-in-appeal No. BR(126)Th-I/2013 dated 20.2.2013 passed by Commissio .....

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ant has appointed commission agents at various locations outside India under written agreement. These agents promote the sale of the product and procure orders for the appellant and the commission is paid on the FOB value of the goods exported. The appellant further alleged that in terms of the provisions of Rule 4 of the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, the appellant has registered with the central excise and as receivers of services in India .....

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agent located outside India. The appellant further alleged that by Notification 41/2007-ST dated 6.10.2007, exemption is provided to the services received by the exporter from certain service providers, which are specifically specified in the said notification. This notification was further amended by Notification No.17/2008-ST dated 1.4.2008 and by this notification, exemption is specifically provided to services provided by the commission agent located outside India and engaged under a contrac .....

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credit amounting to ₹ 34,69,947/- allegedly wrongly availed by the appellant during the period from April 2006 to June 2009 under the proviso to sub-section (1) of Section 11A of the Central Excise Act read with Rule 14 of the Cenvat Credit Rules, 2004 along with interest and penalty under Section 11AB and 11AC respectively. The appellant submitted detailed reply to the show cause notice denying all the allegations in the show cause notice with the help of decided cases by the Tribunal and .....

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Appeals) who vide his order dated 20.2.2013 upheld the order-in-original. Hence the present appeal before this Tribunal. 3. The learned counsel for the appellant submitted that the issue whether the services of the commission agents located abroad are input services for the appellant has already been decided in favour of the appellant by the adjudicating authority vide para 15 of the order-in-original and the Commissioner (Appeals) has wrongly held that the services by the commission agent abroa .....

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pellant is entitled to avail cenvat credit on the service tax paid on the services of commission agent located abroad. The learned counsel took us through these notifications to canvass that it is optional for the exporter to either claim exemption by way of refund or avail cenvat credit and the appellant has chosen to avail cenvat credit as there is no requirement under the said notification to follow any particular procedure as provided in the notification which is required to be followed only .....

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uty. He also submitted that prior to the present audit, accounts of the appellant were audited on earlier occasions and no issue regarding the same has been raised during the course of earlier audit in spite of the fact that several objections on availment of cenvat credit by the appellant were raised. All the transactions with the commission agent abroad have been disclosed in the records from the very beginning and also specifically mentioned in the shipping bills under which the goods were ex .....

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mission agents based abroad. In other words, can the services rendered by the foreign based commission agent be stated to be input services within the meaning of such expression as defined under Rule 2(l) of the Cenvat Credit Rules, 2004? For the purpose of appreciating the definition of input services as prescribed by Rule 2(l) is reproduced herein below:- 2(l) Input service means any service - (i) used by a provider of taxable service for providing an output service, or, (ii) used by the manuf .....

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s accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit relating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal: 7. Before adverting to the merits of the issue, reference may be made to various decisions rendered in the context of expression input services as defined under Rule 2(l) of the Cenvat Credit Rules, 2004. The Tribunal in the case of CCE .....

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in relation to sales promotion , and these activities can rightly be described as sales promotion activities. Sales promotion activities undertaken at a given point of time also aims at sales of goods which are to be manufactured and cleared in future. Any advertisement given has a long term impact and cannot be treated as post clearance activities and therefore, sales promotion has been specifically included in the definition of input services. This decision has been affirmed by the Hon ble Pu .....

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m. I am of the, prima facie, view that the service of commission agent is a service of the sale promotion and would be covered by the definition of input service . 8. It is pertinent to mention that in para 15 of the order-in-original, the adjudicating authority has specifically held that the services of commission agent abroad is input services as the commission agent procured the orders for the appellant and thereafter the appellant manufactured the goods. For holding the services of commissio .....

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