Cenvat credit on sales commission services is admissible where commission agents help sell dutiable goods.

Cenvat credit was held admissible on service tax paid to a commission agent for sales commission used in selling dutiable goods. The Tribunal relied on CBEC Circular No. 943/4/2011-CX, which clarifies that commission-based sales promotion services are covered as input services and that services used for sale of final products up to the place of removal qualify for credit. On that basis, the disallowance was held unsustainable and the credit claim was allowed.

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Issues: Whether Cenvat credit of service tax paid on sales commission to a commission agent for sale of dutiable goods is admissible as input service.

Analysis: The demand had been confirmed on the ground that credit was not available in respect of service tax paid on the commission agent providing business auxiliary service. The Tribunal relied on the Central Board of Excise and Customs clarification in Circular No. 943/4/2011-CX. dated 29-4-2011, which states that credit is admissible on services used for sale of dutiable goods on commission basis. The circular also notes that sale promotion is specifically covered and that services used for clearance of final products up to the place of removal are eligible, making the credit claim sustainable.

Conclusion: Credit of service tax paid on commission paid to a sales commission agent is admissible, and the disallowance was not sustainable.

Ratio Decidendi: Credit of service tax paid on commission-based sales promotion services is admissible as input service when used for sale of dutiable goods.

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