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Birla Sun Life Asset Management Co. Ltd. Versus Commissioner of Service Tax, Mumbai

CENVAT credit - asset management company - input services received from mutual fund agents and distributors Rule 2(l) of Cenvat Credit Rules, 2004 - Held that: - the appellants are eligible for taking credit on the service tax paid by them on brokerage commission and the demand confirmed by the adjudicating authority is liable to be set aside. This issue has been already decided in case [2016 (1) TMI 23 - CESTAT CHENNAI] appeal allowed decided in favor of appellant. - Appeal No. ST/870 .....

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liability under the category of Banking & Financial Services, Business Auxiliary Services Business Support Services Management & Consultancy Services and Sponsorship Services. It is noticed by the lower authorities during the course of audit of records of the appellant, that they had discharged service tax liability under reverse charge mechanism for the commission paid by them to various mutual funds agents/distributors and availed credit of such tax paid. The Revenue authori .....

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of the tax on output services for which this input credit was used. Adjudicating authority after following due process of law, confirmed the demand raised with interest and also imposed penalties. 4. The issue involved in this case is whether the services received from the mutual fund agents/distributors can be considered as input service as defined under Rule 2(l) of the Cenvat Credit Rules, 2004, for the appellant herein and whether the appellant is required to pay commission to these agents/ .....

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ue is no more res integra and has been decided by the Tribunal in the case of Sundaram Asset Management Company Ltd.- 2016-TIOL-756-CESTAT-MAD. While arriving at a conclusion that if the commission paid for brokerage is eligible to avail the CENVAT credit, the Bench considered various decisions of the High Courts as also the SEBI (Mutual Fund) Regulations Act, 1996. We reproduce the ratio which is in paragraphs 12 and 13. 12. The second appeal relates to availment of credit on brokerage fee and .....

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ld that the document on which credit availed, is not an eligible document prescribed under CCR. The adjudicating authority has accepted the fact that in the impugned order appellants have not reimbursed the amount. We find that this issue has been already settled by various High Courts/Tribunals. Further, it is seen that the Revenue had issued a clarification to the appellant in their letter dt. 3.10.2012 to the appellant that they are eligible for cenvat credit on the service tax incurred and p .....

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t is evident that when there was no exemption for service tax, the Board had categorically clarified that assessees have to pay service tax under reverse charge and they are eligible for availing credit. 13. As regards the Revenue's another contention that the document on which credit was availed is not a valid document we find that the issue stands settled by the Hon'ble Madras High Court in the case of CCE Vs M.R.F (supra). The relevant paragraph of the above High Court's order is .....

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credit during the relevant time. If no document was mentioned, TR, challan has to be considered as the proper document reflecting payment of duties. Further, it is also not the Revenue's case that the service tax was not paid by the Respondents or they were otherwise not entitled to the credit of the same. 7. The above said decision of the Tribunal was affirmed by a Division Bench of the Bombay High Court in Commissioner of Central Excise v. Essel Propack Ltd., AIT-2015-73-HC = 2015 (39) S. .....

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red as a proper document, reflecting payment of such tax. Further, it is also not the case of the appellant that service tax was not paid by the respondents or that they were otherwise not entitled to such credit. 8.The Punjab &Haryana High Court, in the case of Commissioner of Central Excise, Ludhiana v. Ralson India Ltd., reported in 2006 (202) E.L.T. 759 (P & 11) held that if the duty paid has the character of inputs and their receipt in manufacturer's factory and utilization in m .....

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for consideration, in such circumstances is the type of document required to be produced to avail of such credit . The respondents have produced the TR 6 Chahar which is emanated from the office of the appellants themselves to support their claim for such CENVAT Credit, which material was accepted by the authorities below whilst passing the impugned order. 10. For the aforesaid reasons, the question of discarding the said Chatham to avail of such CENVAT Credit, as contended by the learned Couns .....

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