Cenvat credit on input services requires factual nexus review, and binding precedent cannot be ignored because an appeal is pending.

Cenvat credit on service tax paid for house keeping, rent-a-cab and courier services requires a proper factual examination of the record and the nexus with manufacturing activity; denial without analysing the supporting material or applying the input-service test is not sustainable. Binding Tribunal decisions must be followed by lower authorities unless stayed, reversed or distinguished, and they cannot be ignored merely because appeals have been filed against them. The matter was remanded for fresh adjudication in accordance with law, with the credit disallowance set aside to that extent.

---

---

Issues: (i) whether Cenvat credit of service tax paid on house keeping services, rent-a-cab charges and courier service charges was liable to be denied without proper examination of the factual basis and the nexus with manufacturing activity; (ii) whether the Commissioner could ignore binding Tribunal decisions merely because appeals had been filed against them.

Issue (i): Whether Cenvat credit of service tax paid on house keeping services, rent-a-cab charges and courier service charges was liable to be denied without proper examination of the factual basis and the nexus with manufacturing activity.

Analysis: The impugned order did not analyse the material on record supporting the claim for credit and did not record any finding that the assessee had failed to produce evidence or that the requisite nexus between the services and manufacturing activity was absent. The rejection of credit was therefore not based on an examination of the factual matrix or a proper application of the legal test governing input services and Cenvat credit.

Conclusion: The denial of credit on this issue could not be sustained and the matter required fresh consideration.

Issue (ii): Whether the Commissioner could ignore binding Tribunal decisions merely because appeals had been filed against them.

Analysis: Mere filing of an appeal does not suspend the operation of the order appealed against. Judicial discipline required the lower authority to follow the Tribunal decisions unless they were reversed, suspended, or distinguishable. Ignoring those decisions solely because departmental appeals were pending was contrary to judicial propriety.

Conclusion: The Commissioner was not justified in disregarding the Tribunal decisions on that ground.

Final Conclusion: The impugned order was set aside to the extent it disallowed credit on the three services, and the matter was remanded for fresh adjudication in accordance with law without expressing any view on the merits.

Ratio Decidendi: A lower authority must independently examine the facts and apply the law to a claim for credit, and it cannot disregard binding precedent merely because an appeal against that precedent has been filed unless the order has been stayed, reversed, or distinguished.

---