CENVAT credit on input services turns on business nexus, with partial allowance, remand for verification, and penalties set aside.

CENVAT credit on multiple input services was examined under Rule 2(l), including the business nexus test and, where relevant, the integral connection approach. Credit was treated as admissible for photocopier AMC, factory-to-depot GTA, and dealer-provided warranty services, while club membership was held not to relate to business. For air/rail travel, car hire, authorised service station, management consultancy, recovery agent, insurance, courier, professional fees, packing expenses, and some GTA claims, the matter was remanded for fresh factual verification and application of the correct legal test. Penalties under Rule 15(3) were set aside, and interest issues were left to be reconsidered on remand.

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Outcome: The appeal was not finally decided by the Division Bench and the records were directed to be placed before the President for reference to a Third Member on the points of difference.

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