Cenvat credit on courier and internet services may be available where they have a direct nexus with business operations.

Courier services used for dispatch of final products and internet services used in office research were treated as having a direct nexus with business operations under the definition of input service in Rule 2(l) of the Cenvat Credit Rules, 2004. On that basis, the claim for Cenvat credit could not be rejected at the interim stage, and the appellant was found to have made out a strong prima facie case for waiver of pre-deposit and stay of recovery.

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Issues: Whether the appellant had made out a prima facie case for waiver of pre-deposit and stay of recovery in respect of the denial of Cenvat credit on courier services and internet services used in relation to the business.

Analysis: The services in question were examined in the context of the definition of input service under Rule 2(l) of the Cenvat Credit Rules, 2004. Internet services used in the office could relate to research connected with the manufactured products, and courier services used for despatch of final products were found to have a direct nexus with business operations. On that basis, the claim for Cenvat credit could not be rejected at the interim stage.

Conclusion: The appellant established a strong prima facie case for waiver of pre-deposit and stay of recovery.

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