Service tax on commission

We are a manufacturer of chemicals.For the year 2007-2009 we had paid service tax of about Rs.3,50,000 on sales commission &  taken this amount as credit which was subsequently used for regular clearance of our goods. Department has serviced us a notice that such credit can not be used as this is not a part of service used towards Input of goods produced. They have further given a show cause for penalty proceedings. Please advice the correct status.

Replies (1)

You are eligible. Commision agents service is input service.CESTAT Bangalore 266ELT369(2011). 

Even otherwise, the SCN is barred by limitation. Bcause, on interpretation matters extended period is not invocable.

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