Cenvat credit on group insurance and rent-a-cab services accepted where binding precedent treated them as eligible input services.

Cenvat credit on group insurance premium and rent-a-cab services was treated as admissible where the input services had a sufficient nexus with the output services and earlier coordinate and higher forum decisions had already settled the issue in favour of eligibility. On that basis, the demand, together with interest and penalties, was not sustained. The discussion states that once binding precedent recognises such services as eligible input services under the credit scheme, credit cannot be denied merely on a restrictive nexus objection.

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Issues: Whether Cenvat credit on group insurance premium and rent-a-cab services was admissible to the appellant.

Analysis: The dispute turned on whether the impugned input services had the requisite nexus with the output services. The Tribunal noted that the issue had already been settled in earlier decisions, including decisions of coordinate and higher judicial forums, taking the view that such credit was allowable. In light of that settled position, no further reason remained to sustain the demand.

Conclusion: Cenvat credit was held to be admissible, and the demand with interest and penalties could not be sustained.

Final Conclusion: The appeal was allowed with consequential relief, and the impugned denial of credit did not survive.

Ratio Decidendi: Where the issue of eligibility of Cenvat credit on input services is already settled by binding precedent, credit cannot be denied merely on a restrictive nexus objection if the services are treated as eligible input services under the governing credit scheme.

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