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TMI Blog2024 (1) TMI 982X X X X Extracts X X X X X X X X Extracts X X X X ..... on paid to commission agent, hence the credit is not available to the appellant. 2. Shri Saurabh Dixit, Learned Counsel appearing on behalf of the appellant submits that there is no dispute that the director of the appellant company is not commission agent but he is the director on the board of the directors of the company and as per the boards resolution the directors are entitled for share in the profit as remuneration, which is called as commission. Therefore, the commission paid to the director is nothing but a remuneration towards its directorship in the company, the director is not commission agent. Therefore, entire basis of the department's case being on wrong footing fails on this count itself. 2.1 He also refers to the Article o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment of commission by the company, which is participation part of the profit earned by the company. The company also passed the resolution which is scanned below : From the above board resolution, it can be seen that as per the first resolution sum of Rs. 1 Crore to be paid equally to four directors of the company by way of commission this clearly shows that the commission paid to the director in the fact of the present case is not a sales commission paid to a commission agent but it is a remuneration paid to the directors. This very same issue has been considered by the board in the following Circular No. 115/9/2009-ST dated 31.07.2009 which is reproduced below: Circular No. 115/9/2009-S.T., dated 31-7-2009 Dy. No. 324/Comm (ST)/200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents made by Companies, to Directors cannot be termed as payments for providing management consultancy service. Therefore, it is clarified that the amount paid to Directors (Whole-time or Independent) is not chargeable to service tax under the category 'Management Consultancy service. However, in case such directors provide any advice or consultancy to the company, for which they are being compensated separately, such service would become chargeable to service tax. 3. In view of the above, it is clarified that remunerations paid to Managing Directors/Directors of companies whether whole-time or independent when being compensated for their performance as Managing Directors/Directors would not be liable to service tax. Pending issues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacturer and it cannot be considered as a post-manufacturing activity. The finance / raising a capital or adjustment of finances by way of taking insurance etc. falls within the inclusive part of the definition. This cannot be said to be a post-manufacturing activity for the reason that such insurance policies addresses the financial risks of the manufacturer. Further, in the case of Granules India Ltd. (supra), the Tribunal has held that the credit availed on directors' liability insurance is eligible. I find that the disallowance of credit on this input service is unjustified and requires to be set aside, which I hereby do. 6. The second issue for consideration is regarding the eligibility of credit on service tax paid on Director Sit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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