LAWS(CB)-2013-10-2

JODHANI PAPERS LTD. Vs. COMMISSIONER OF C. EX.

Decided On October 09, 2013
Jodhani Papers Ltd. Appellant
V/S
COMMISSIONER OF C. EX. Respondents

JUDGEMENT

(1.) THE short issue involved in this case is whether appellant is eligible for the benefit of Cenvat credit of service tax paid on sales commission paid by them to their agents.

(2.) The service tax has been paid treating the services rendered as Business Auxiliary Service. Show cause notice was issued to the appellants proposing to deny the credit on the ground that the said service is not an input service at all. Further the lower authorities during the course of proceedings have taken the view that the activity undertaken by the agents cannot be considered as sales promotion at all and therefore credit could not have been taken. The learned CA on behalf of the appellants submits that on the very same issue for the subsequent periods in respect of 3 show cause notices, the Commissioner (Appeals) has extended the benefit of credit of service tax paid and according to his information no appeal has been filed against this decision. Secondly he submits that the department has traveled beyond the proposal in the show cause notice when taking the view that the activity of commission agent does not amount to sales promotion. Further he also submits that the Board vide Circular No. , dated 29 -4 -2011 had clarified that benefit of Cenvat credit paid by commission agents as sales commission would be admissible.

(3.) 1 I have considered the submissions made by both the sides. First of all I find that the Board's circular cited by the learned CA is squarely applicable to the facts of this case. For ready reference item No. 5 of the issue framed by the Board and the clarification issued by the Board is reproduced below: