Case Law Details
CGST C&CE Vs M/s Krishi Icon (CESTAT Delhi)
Explanation to Rule 2 (l) of Rules 2004 says it in clear terms that there is no bar on availment of Cenvat credit on sales promotion service by way of sale of dutiable goods on commission basis. During the period from 2008 onwards this issue has been considered by various appellate authorities and the Board has also issued clarification vide Circular dated 29/04/2011 specifically under point No. 5 which contains the wording that “… Moreover activity of sales promotion is specifically allowed and on many occasion the remuneration for same is linked to actual sale. Reading the provisions harmoniously it is clarified that credit is admissible on the services of sales of dutiable goods on commission basis”. From this clarification itself it is understood that if a commission agent is paid commission on account of sales of goods, his services are qualify to be input service and Cenvat credit of service tax paid on such service is admissible to the recipient of service. I find that the issue stand settled after the said clarification itself. Further this issue has also been clarified at point B-30 of Minutes of Tariff Conference of Central Excise held on 28-29th October 2015 circulated vide F. No. 96/85/15-CX. I dated 07/12/2015 wherein subject service has been considered as input service. Taking into consideration the circumstances under which the explanation was inserted in Rule 2 (l) of Rules 2004 and consequences of the explanation to extent the benefit to the assessee as per Board Circular, this Tribunal has constantly taken the view that the explanation inserted in Rule 2 (l) of Rules 2004 by notification dated 03/02/2016 is declaratory in nature and has to be complied retrospectively. I do not find any reason to differ with the above-mentioned constant view taken by this Tribunal in catena of decisions. In view thereof the appeal filed by the Department is rejected.
FULL TEXT OF THE CESTAT JUDGMENT
The instant appeal has been filed from the order-in-appeal dated 16/01/2018.
2. The respondent/assessee is engaged in providing the “construction of residential complex services, real estate agent services and business support services”. During the course of audit of records of the respondent/assessee it was observed that the assessee had availed Cenvat credit of service tax paid on “commission/brokerage on sale of flats” amounting to Rs. 40,56,453/- during the period from July 2013 to September 2015. Accordingly, a show cause notice was issued to the respondent/assessee as to why :-
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