Broad input service nexus supports CENVAT credit for event management and technical consultancy services

Credit of service tax on event management service and scientific and technical consultancy service was treated as admissible input service credit under Rule 2(l) of the CENVAT Credit Rules, 2004. The analysis applied a broad input service definition covering services used directly or indirectly in relation to manufacture and activities relating to business, and treated the services as sufficiently connected with factory operations and manufacturing activity. Relying on prior judicial interpretation, the disallowance of CENVAT credit was set aside and relief was granted to the assessee.

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Issues: Whether credit of service tax on event management service and scientific and technical consultancy service was admissible as input service under Rule 2(l) of the CENVAT Credit Rules, 2004.

Analysis: The input service definition was applied as a wide one, covering services used directly or indirectly in or in relation to manufacture and also services falling within activities relating to business. The services in question were treated as connected with factory operations and manufacturing activity, and the decision relied on prior judicial interpretation accepting a broad nexus test for input service credit.

Conclusion: The services qualified as input services and CENVAT credit was admissible in favour of the assessee.

Final Conclusion: The disallowance of CENVAT credit was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: Services having a sufficient nexus with manufacture or business operations are eligible as input service credit where the statutory definition is expressed in broad terms.

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