TMI Blog2024 (1) TMI 982X X X X Extracts X X X X X X X X Extracts X X X X ..... ors is not commission within the scope of Business Auxiliary Services . With this clarification also, it is clear that payment made to directors even under the nomenclature of commission, the same is not the commission classifiable under Business Auxiliary Services . Therefore, in our view the said commission is part of remuneration paid to the directors, hence not a sales commission. Accordingly, the same is eligible for Cenvat Credit to the appellant. This issue has been elaborately considered by this Tribunal in the case of M/S. RANE BRAKE LINING LTD. VERSUS COMMISSIONER OF GST CENTRAL EXCISE [ 2018 (7) TMI 611 - CESTAT CHENNAI] , wherein the Tribunal has held that it is the duty of the director to attend the meetings and therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also refers to the Article of association of the company to show that the remuneration paid to the director include salary commission or participation in profits. Therefore, the payments under the nomenclature of commission made to the director is nothing but remuneration paid to them. Therefore, the credit of Service Tax paid on such remuneration is admissible to the appellant. In support of his submission, he placed reliance on the following judgments: M/s. Rane Brake Lining Ltd 2018 (7) TMI 611- CESTAT Chennai CBEC Circular No. 115/9/2009-ST, Dated 31.07.2009 M/s. SKN Organics P Limited 2016 (10) TMI 1201- CESTAT Chennai 3. Shri A K Kanani, Learned Superintendent (AR) appearing on behalf of the revenue reiterates the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /9/2009-S.T., dated 31-7-2009 Dy. No. 324/Comm (ST)/2008 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject: Service tax on commission paid to Managing Directors/Directors by the company - Regarding Below mentioned issues have been referred to the Board seeking clarifications, - (i) applicability of service tax under 'Business Auxiliary service on commission paid to Managing Directors/Directors (whole time, or Independent) by the company, (ii) applicability of service tax on Independent Directors who are part of the Board of Directors under 'Management Consultant service'. 2. Both the matters have been examined by the Boa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormance as Managing Directors/Directors would not be liable to service tax. Pending issues may be resolved in line with the above. From the above circular, it was categorically clarified that even if any amount paid to the director as a commission, the said amount paid by a company to their directors is not commission within the scope of Business Auxiliary Services . With this clarification also, it is clear that payment made to directors even under the nomenclature of commission, the same is not the commission classifiable under Business Auxiliary Services . Therefore, in our view the said commission is part of remuneration paid to the directors, hence not a sales commission. Accordingly, the same is eligible for Cenvat Credit t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... econd issue for consideration is regarding the eligibility of credit on service tax paid on Director Sitting Fees. The said issue is covered by the decision in the case of SKN Organics P. Ltd. (supra). Further, it is also to be stated that it is the duty of the director to attend the meetings and therefore the service tax paid on such fees is eligible for credit. 7. From the discussions made above, I am of the view that the disallowance of credit on the impugned services is incorrect and requires to be set aside, which I hereby do. The impugned order is set aside and the appeal is allowed with consequential relief, if any. In view of the above discussions and findings, we are of the view that the appellant is legally entitled for ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
