Cenvat credit on company car insurance allowed where vehicle use had a sufficient business nexus and official-purpose linkage.

Cenvat credit was treated as admissible on car insurance premiums where the vehicles were company-owned, the premium was paid by the assessee, and the cars were used for both directors' travel and official business purposes. The service was considered to have a sufficient nexus with business activity, so insurance of such vehicles qualified as an input service. On that basis, the disallowance was set aside and credit was allowed in favour of the assessee.

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Issues: Whether Cenvat credit on car insurance was admissible as input service.

Analysis: The cars were owned by the appellant and the insurance premium was paid by it. The vehicles were used for the director's use as well as for official purposes. In such circumstances, services availed in the course of business were treated as eligible for Cenvat credit.

Conclusion: Cenvat credit on car insurance was held admissible and the disallowance was set aside in favour of the assessee.

Ratio Decidendi: Services used in the course of business, including insurance of company-owned vehicles used for official purposes, qualify for Cenvat credit where they have a sufficient nexus with the business.

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