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TMI Blog2018 (5) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 1302 1919, 2815 1110 and 29420090 of Central Excise Tariff Act, 1985. During the audit of the financial records of the appellant by the internal audit team, it was observed that the appellant had availed CENVAT credit on „sales commission‟ paid to the commission Agents during the period of March 2010 to November 2014 which is ineligible. It was noticed from the CENVAT credit register, input/input service invoices that the appellant have availed CENVAT credit to the tune of Rs. 2,04,542/- on sales commissions paid to M/s. Medilux Laboratories Pvt. Ltd. M/s. Deep Nutraceuticals, M/s. Shivas Farma Casa (P) Ltd. M/s. Shah Pharmaceuticals who are their „Commission Agents‟, involved in sales of the goods manufactured b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le in law as the same has been passed without considering the factual and the legal position and without following the binding judicial precedent. He further submitted that the Board Circular No.943/4/2011-cx dated 29.4.2011 clarifies that the definition of „input service‟ allows all services used for clearance of final products up to the place of removal. Moreover, the activity of sales promotion is specifically allowed and on many occasions, the remuneration for the same is linked to actual sale. Reading the provisions harmoniously, it is clarified that the credit is admissible on the services of sale of dutiable goods on commission basis. He also submitted that the Notification No.2/2016-CE dated 3.2.2016 inserted Explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich amounts to sale of the products is deemed to be sales promotion activity in the normal trade parlance. The commission is paid on sales of the products/services with an intention to boost the sale of the company. In view of the same, the sales commission has a direct nexus with the sales which in turn is related to the manufacture of the products. It is to be understood that there need not be manufacture unless there is sale of product. To increase the manufacturing activity encouragement is being given for increased sales. Hence, the commission paid on sales becomes part of sales promotion resulting in increased manufacturing activity. 6.1 Further, I follow the ratio of Essar Steels India Pvt. Ltd. cited supra, wherein the Division Be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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