Date 27 September 2022

• TheRespondent, M/s. Himadri Specialty Chemical Limited, was engaged in the manufacture of medicaments and had availed CENVAT Credit on service tax paid on the technical and analysis service, commission paid to the foreign agents, courier service etc. . 
• An audit was conducted on the respondent for the period from April, 2014 to March, 2015 and the appellant noticed that the respondent has availed and utilized input credit of service tax against the commission paid to various service providers who are acting as commission agents. 
• Department contended that the role of the commission agent cannot be treated as input service and credit cannot be availed by the respondent. 
• Show cause as to why the CENVAT duty amounting to Rs. 3,99,07,593/- (including Cess) for the period from October, 2011 to February, 2016 shall not be confirmed and recovered from the respondent with interest and penalty as per Rule 14 of the CENVAT Credit Rules, 2004 read with Sections 11A(4), 11AA and 11AC of the Central Excise Act, 1944 (the Act)
• Aggrieved, this Appeal is filed by Revenue. 

Issue

• Whether Respondent is eligible for Cenvat Credit ?

Order:

• High Court relied on the case of Cadila Health Care wherein the position stood clarified that sales promotion would include services by way of sale of goods on commission basis. 
• Further, it is seen that the commission paid by the respondent to the commission stockist is included in the assessable value of the goods on which excise duty has been paid by the respondent on the final products namely carbon black.
• Also, the Respondent had disclosed all the materials in their returns and the assessee was also subjected to audit earlier and there was no objection raised by the audit department. Therefore, on the said ground also the assessee is entitled to succeed.