Cenvat credit on consultancy services allowed where business nexus and input service use were adequately evidenced.

Consultancy services used for environmental evaluation, onsite assessment and reporting were held to have a sufficient nexus with the assessee's business and therefore qualified as input services for Cenvat credit. The purchase order and related documents, including the factory-address order, were treated as adequate evidence of business linkage. As credit was found admissible, the disallowance was set aside and the penalty was also held unsustainable.

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Issues: Whether the appellant was entitled to Cenvat credit on consultancy services treated as input services, and whether the penalty was sustainable.

Analysis: The purchase order showed that the consultancy services were engaged for environmental evaluation work, including onsite evaluation and submission of report, and the order was raised at the factory address. The documents produced were sufficient to establish that the services had a nexus with the assessee's business and qualified as input services. Once credit was held admissible, the penalty could not survive.

Conclusion: The appellant was entitled to Cenvat credit and the disallowance, along with the penalty, was set aside.

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