Monday, March 3, 2014

Whether CENVAT Credit available on overseas sales Commission?

Regarding the availability of CENVAT Credit there are two contrary decisions from High Courts.They are:-

1. Punjab and Haryana High Court held in favor of tax payer  in Commissioner of Central excise, Ludhiana v. Ambika Overseas 2012 (25) S.T.R. 348 (P&H)

2. Gujarat High Court held in favor of the department in CCE, Ahemedabad II v. Cadila Health care Limited - 2013 (30) S.T.R.(Guj.)

Howvever, the following important facts were not placed before Gujrat High Court:

    (a) CBEC Circular No: 94304/2011-CX, April, 29, 2011 --- Refer para 5.

    (b) Notification No: 42/2012 dated 29.06.2012.

    (c) Bombay High Court decision in Coca Cola India Pvt Ltd. v. CCE, Pune
         III 2009 (242) E.L.T 168 (Bom.)

    (d) CCE, Nagpur v. UltraTech Cement Ltd 2010 (20) S.T.R. 577 (Bom)

Tax payers in states other than Punja & Hariana and Gujrat can follow one of  the two judgement.

(it may be noted that now more and more decisions from Tribunals are coming both in favor and against the tax payers.

1. Century Rayon v. CCE, Thane I 2014 (33) STR 427 (TRi. Mumbai) - Favourable to tax payer.

2. CCE, Surat II v Astik Dyestuff P Ltd [2014] 43 GST 660 (Ahmedabad-CSTAT )- Unfavourable to tax payer.

 It is better to clarify the position by issuing a clarificatory circular by CBEC)