ST paid on commission on sale of final product is eligible for input service credit

CESTAT, MUMBAI BENCH

Commissioner of Central Excise, Nagpur

versus

Central Cables Ltd.

ORDER NOS. S/372/2012 & A/219/2012/SMB/C-IV

APPLICATION NO. E/S/2239 OF 2010

APPEAL NO. E/2044 OF 2010

JUNE 22, 2012

ORDER

1. Revenue is in appeal along with the application for stay against the impugned order wherein the CENVAT Credit availed by the respondent on service tax paid by them to agents who have charged commission for selling their final goods.

2. After hearing for sometime, I find that appeal itself can be disposed of at this stage. Therefore stay as well as appeal are taken up for disposal.

3. The facts of the case are that the respondents are manufacturers of excisable goods. During the course of selling of their final product, they availed the service of selling agent who paid service tax on the commission received from the appellant and issued in voices to the appellant showing service tax. The respondent took the credit of the commission paid by them to selling agent. Revenue is of the view that the services of selling agent has been availed by the respondents outside their factory premises, therefore, they are not entitled for CENVAT credit on commission to selling agent. Show-cause notice was issued, adjudication took place confirming the demand along with interest and penalty which was challenged before the Commissioner (Appeals), who set aside the adjudication order and allowed the appeal filed by the respondent. Against the appeal, revenue is before me.

4. It is well settled that the assessee is entitled to take CENVAT credit of service tax paid by them on the services availed by them in the course of business of manufacturing as held by the Hon’ble High Court of Bombay in the case of CCE v. Ultratech Cement Ltd. [2010] 29 STT 244 (Bom.). Therefore, it is no doubt in this case also respondents are entitled for input service credit as availed by them on Business Auxiliary Service i.e. commission paid to selling agent. Therefore, I do not find any infirmity in the impugned order and same is upheld.

5. Appeal as well as the st ay application filed by the revenue is dismissed.

NF