TMI Blog2019 (8) TMI 1838X X X X Extracts X X X X X X X X Extracts X X X X ..... bove amendment would be applicable retrospectively and would cover cases for the past period also. The co-ordinate Bench of this Tribunal at Ahmedabad held that In the present case, the expressions in the explanation as inserted by Notification No. 2/2016-C.E. (supra), make it clear that it is for explaining the meaning of clause sales promotion in the context of Rule 2(l) of the Rules, 2004. It is to provide an additional support to the dominant object of the word sales promotion in Rule 2(l) in order to make it meaningful and purposeful. The language of the explanation is consistent with Board Circular to the benefit of the assessee and it would be effective retrospectively. Time Limitation - malafide intent or not - HELD THAT:- It is not in dispute that the availment of credit was duly disclosed in ER-1 returns. The observations made by the Ld. Commissioner that the nature of credit availed was not disclosed by appellant in the return is not correct for the reason that in the absence of any column in the return requiring the assessee to disclose the nature of input service, the same cannot be construed to mean that there is a malafide intention on the part of the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g warehouse facility etc. He submitted that the responsibility assigned to the Consignment Stockist is not restricted only to sale of product but also includes activities undertaken for promotion and sale of company s goods. He made the Bench go through agreement dated 01.04.2013 with Parikh Co. as appearing in pg. no. 182 of the Appeal Paper Book, which reads as below: 4. (b) The Consignment Stockist will provide good, safe and sufficient warehouse accommodation of class 1 construction for storing the products consigned to it. 5.(b) .....The Consignment Stockist will make its best endeavour to promote, develop and extend sales of the products. 7. The Consignment Stockist shall work diligently and faithfully to foster and promote sales of the products within territory/areas as stated above and safeguard Company s interest to the best of its ability. 8. The Consignment Stockist shall convey to the Company all information regarding demand of enquires of the product from outside its territory/area that may come to its knowledge. He submitted that the scope of the agreement is not restricted only to sale of the goods but also various activities fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit was duly disclosed in ER-1 returns filed with the department. He stated that in the absence of any column in the return to disclose the nature of input service, the same cannot be construed to mean mala fide intention on the part of the assessee. In this regard, he relied on the decision of UltraTech Cement Ltd. v. CCE, Jaipur-II [2014 (48) taxmann.com 99 (New DelhiCESTAT). He also contested the imposition of penalty on same counts. 5. The Ld. DR appearing for the Revenue justified the demand by placing reliance on the decision of the Hon ble Gujarat High Court in Cadila Healthcare Ltd (Supra) wherein the credit on services provided by selling agents have been disallowed. He accordingly prayed that the appeal of the assessee be rejected. 6. Heard both sides and perused the appeal records. 7. We find that the short issue that arises for consideration is whether the appellant is entitled to avail credit on services provided by Consignment Stockists. We have perused the subject agreement and find that apart from effecting mere sale of goods, the concerned agents are also mandated to undertake sales promotion related activities. It is specifically stated in the agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be applicable retrospectively and would cover cases for the past period also. The co-ordinate Bench of this Tribunal at Ahmedabad held as below: 22. An explanation inserted in a Section/Rule, is generally to explain the meaning of the words contained in the Section/Rules. The purpose of explanation is to explain the meaning and intendenments of the Section/Rule. Sometimes, the explanation may be inserted to clarify a doubtful point of law, which would be effective retrospectively. In the present case, the expressions in the explanation as inserted by Notification No. 2/2016-C.E. (supra), make it clear that it is for explaining the meaning of clause sales promotion in the context of Rule 2(l) of the Rules, 2004. It is to provide an additional support to the dominant object of the word sales promotion in Rule 2(l) in order to make it meaningful and purposeful. The language of the explanation is consistent with Board Circular to the benefit of the assessee and it would be effective retrospectively. The Hon ble Supreme Court in the case of Vatika Township Pvt. Ltd. (supra), in the identical situation, held that if a legislation confers a benefit on some other person or on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Apex Court, in that circumstance the Adjudicating Authority is independent to take any view on merits of the case. Therefore, we are taking independent view and hold that appellants are entitled to avail Cenvat credit on commission paid to the selling agent for selling the goods in terms of Rule 2(l) of the Cenvat Credit Rules, 2004. The aforesaid views have also been taken by this Tribunal in the following cases- Birla Corporation Ltd. vs. CCE Lucknow 2014 (35) STR 977 (TriDel) CCE Alwar vs. Orient Refractories Ltd (CESTAT Delhi Final Order no 50494/2019 In view of the above discussions, we agree with the submissions made by the Ld. CA that the appellant is legally eligible for credit. Further, in so far as limitation is concerned, it is not in dispute that the availment of credit was duly disclosed in ER-1 returns. The observations made by the Ld. Commissioner that the nature of credit availed was not disclosed by appellant in the return is not correct for the reason that in the absence of any column in the return requiring the assessee to disclose the nature of input service, the same cannot be construed to mean that there is a malafide intention on the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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