Cenvat credit on courier services for sample dispatch is admissible, subject to proof of actual business use.

Cenvat credit on courier services is admissible where the services are used to dispatch samples to customers for approval, as such use is in furtherance of business and qualifies as an eligible input service. The Tribunal noted, however, that the adjudicating authority had not conclusively verified whether the courier charges actually related to sample dispatch or to another purpose. The credit claim was therefore supported in principle, but the matter required limited factual verification before final determination of entitlement.

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Issues: Whether Cenvat credit of service tax paid on courier services is admissible when the courier service is used for dispatch of samples to customers for approval, and whether the matter required factual verification before granting the credit.

Analysis: The disputed credit was denied on the assumption that the courier services were used for dispatch of finished goods on a sale basis. The documents produced before the Tribunal indicated that the courier consignments were for sending samples to overseas customers for approval. Where courier services are used for forwarding samples in furtherance of business, the credit is admissible. However, the factual position as to whether the courier charges related to sample dispatch or to some other purpose had not been verified conclusively by the adjudicating authority.

Conclusion: Cenvat credit on courier services used for dispatch of samples for approval is admissible, but the matter had to be remitted for verification of the factual basis of the claim.

Final Conclusion: The assessee succeeded on the legal principle governing eligibility of credit, but the dispute was sent back for limited factual examination before the credit claim could be finally determined.

Ratio Decidendi: Courier services used for dispatch of samples to customers for approval qualify as eligible input services for Cenvat credit, subject to proof of the factual use of such services.

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