Sales promotion commission qualifies as input service, making CENVAT credit admissible for finished product promotion.

Service tax paid on commission to sales promotion agents was treated as input service because the agreement covered sales promotion for selling finished products, and sales promotion falls within the inclusive definition of input service under Rule 2(l) of the CENVAT Credit Rules, 2004. The reliance on Cadila Healthcare was found inapplicable because that case concerned a different factual situation and not sales promotion activity. CENVAT credit was therefore admissible, and the denial of credit was set aside in favour of the assessee.

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Issues: Whether service tax paid on commission paid to sales promotion agents for promoting sale of finished products qualifies as input service under Rule 2(l) of the CENVAT Credit Rules, 2004, so as to allow CENVAT credit.

Analysis: The agreement with the agent specifically provided for sales promotion activities for selling the finished products. Sales promotion is expressly covered in the inclusive part of the definition of input service. The reliance placed on the decision in Cadila Healthcare was held inapplicable because that case involved a different factual situation and did not concern sales promotion activity as the subject matter of dispute.

Conclusion: CENVAT credit of the service tax paid on such sales promotion activity was held admissible, and the demand confirming denial of credit was set aside in favour of the assessee.

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