2026-VIL-928-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Availability of Cenvat Credit on Sales Commission services rendered by commission agents engaged in promoting, canvassing orders and effecting sales – Denial of credit on the ground that activities of commission agents constitute post-removal activities falling outside the scope of Rule 2(l) of the Cenvat Credit Rules, 2004 - Whether Cenvat credit is available on sales commission services – HELD - The Cenvat Credit Rules have been amended to include an explanation to Rule 2(l) clarifying that sales promotion includes services by way of sale of dutiable goods on commission basis. The aforesaid explanation was inserted as a clarification, and as a result of which, sale of goods on commission basis also stands covered under the expression ‘sales promotion’. Thus, Cenvat credit of service tax paid is available for sales promotion which also includes sales commission - Further, the Board Circular No. 943/4/2011-Cx dated 29.04.2011 clarifies that Cenvat credit is admissible on services of sale of dutiable goods on commission basis. The denial of Cenvat credit on sales commission is set aside - No suppression of facts with intention to evade tax is established in the case as the appellant acted on bonafide belief that the credit was admissible, and therefore extended period of limitation cannot be invoked - Since there is no irregularity in the availment of credit as the same is found to be legally permissible, no penalty is imposable on the individual officer - The impugned order is set aside and the appeals are allowed
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