COMMISSIONER OF C. EX. Vs. AMBIKA FORGINGS

JUDGEMENT

(1.) LD . DR Shri K.P. Singh submits that overseas commission paid by the Respondent was not at all an input service having no connection with manufacture or sale activities. He relies on the meaning of promotion according to Webster's Dictionary. Revenue conceives that the meaning of the term "promotion" if not defined by law, meaning thereof shall be the meaning as has been given by the grounds of appeal of Revenue. Therefore ld. Commissioner has come to erroneous conclusion to hold that the overseas commission is an input service and allowed CENVAT credit. Ld. DR also submits that the overseas service does not relate to manufacture and also that relates to the place beyond place of removal.

(2.) LD . Counsel Shri Poojan Malhotra appearing on behalf of the Respondent supports the order of the ld. first Appellate Authority below.

(3.) IT may be stated that where there is a legislative meaning of a term used in law, it is unsafe to adopt dictionary meaning. In common business or commercial parlance business promotion adds to earning of Revenue for a seller or a manufacturer. Whether addition to revenue earning by a manufacturer is made by manufacture of extra quantity goods has earned excise duty is also relevant. If business promotion activity adds to Revenue by manufacture and sale of incremental quantity, the business promotion activity may have nexus to such sales. Accordingly, service tax paid on such service may be attributable to input service tax. Claim of CENVAT credit is made to avoid cascading effect under Rule 2 (l) (ii) of the CENVAT Credit Rules, 2004. Once legislative mandate is apparent, no technical meaning need to be assigned to deny relief to the Respondent. In absence of Revenue's finding that the business promotion has not resulted with any promotion of business activities there would have been a case for Revenue. But that is not coming out from show -cause notice. When the order suffers from such an infirmity there is nothing to impeach the order of the ld. Commissioner (Appeals). In terms of the word "includes" in Rule 2(l) (ii) of the CENVAT Credit Rules 2004, broad activities which are having nexus to business and integrally connected are brought to the fold of input service. Therefore a pedantic view cannot be taken. Revenue's appeal is dismissed accordingly.