Proportionate CENVAT credit denied where common input services lacked records separating sales activity from taxable service use.

Proportionate CENVAT credit on common input services was denied where the assessee carried on both motor vehicle sales and authorised service station activity but maintained no separate records to identify service-wise use. In the absence of documentary evidence showing the extent of input services attributable to the taxable service activity, and where the disputed credits were more closely connected with the sales business, proportional credit could not be allowed. The disallowance was sustained.

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Issues: Whether the appellant was entitled to avail proportionate CENVAT credit on common input services used partly for sale of motor vehicles and partly for authorised service station activity.

Analysis: The appellant carried on both sale of motor vehicles and provision of authorised service station services, but maintained no separate records to distinguish services used for taxable service from those used for sales activity. The disputed credits largely related to services having a closer connection with the sales business, and no documentary evidence was produced to establish the extent of use of the input services for the service station activity. In the absence of such evidence, proportional credit could not be allowed.

Conclusion: The claim for proportionate input service credit was rejected and the disallowance was sustained.

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