Commission agent services qualify as input service for CENVAT credit where they are used for sales promotion and effecting sales.

Commission paid for services of agents engaged in selling goods falls within the inclusive limb of "input service" under Rule 2(l) of the CENVAT Credit Rules, 2004 because sales promotion is expressly covered. The Tribunal also relied on the CBEC clarification that credit is admissible on commission-based sale services for dutiable goods, together with consistent Tribunal views allowing credit on similar commission payments. On that basis, denial of CENVAT credit on commission agent services was unsustainable and the assessee was entitled to avail the credit.

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Issues: Whether service tax paid on commission agent services used for sale of goods qualifies as an input service under Rule 2(l) of the CENVAT Credit Rules, 2004, so as to entitle the assessee to CENVAT credit.

Analysis: The inclusive part of the definition of input service expressly covers sales promotion. The Tribunal noted the CBEC clarification stating that credit is admissible on services of sale of dutiable goods on commission basis, and also relied on the consistent view taken in the assessee's own subsequent period and other Tribunal decisions allowing credit on commission paid to agents who effect sales. On this basis, the Tribunal held that commission paid for sale of goods falls within the scope of input service.

Conclusion: The denial of CENVAT credit on commission agent services was unsustainable and the assessee was entitled to the credit.

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