Exporter proves Eligibility for Claiming Benefit as Commission paid less than 10% of FOB value: CESTAT Allows Appeal [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh, allowed an appeal wherein the exporter proved their eligibility to claim benefit as the commission paid was less than 10% of FOB value.

The appellants, Acme Forgings, were issued show cause notice (SCN) dated 10.06.2015 alleging violation of the Notification they were claiming a benefit of. It was also averted in the SCN that the commission paid exceeded 10% of the FOB value.

The counsel for the appellants submitted copies of bank relation certificates, statement showing different invoices for the commission paid, copy of statements of account and a certificate dated 27.08.2025 to the effect that the appellant has paid the commission.

They had also enclosed copies of bank advice and copies of agreements entered with overseas commission agent. It was also contended that the conditions in the notification are regulatory and not mandatory.

CESTAT observed that the appellants have substantially compiled with the provisions of the law. The tribunal noted submitted invoices in original along with the certification that the taxable services to which that document pertains has been received and used for exportof goods.

It was also found that the appellants have made themselves eligible for exemption as they have compiled with the condition of paying less than 10% of the FOB value as commission.

The bench of S.S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) allowed the appeal. CESTAT noted that procedural infractions should not be a hindrance in extending the benefit of Notification No. 42/2012 subject to substantial compliance.

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