CENVAT credit on business-linked and employee welfare services was upheld as admissible under input service rules.

CENVAT credit was treated as admissible on services used at sister units, employee welfare services such as insurance and rent-a-cab for employee trips, and services connected with marketing offices. The Tribunal held these services fell within the ambit of input service under Rule 2(l) because they were connected with the assessee's business and employee cost had already been included in the cost of production. It also relied on its earlier decision in the assessee's own case for the prior period, which had accepted credit on the same categories of services, and the disallowance was therefore unsustainable.

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Issues: Whether CENVAT credit was admissible on the disputed services under Rule 2(l) of the CENVAT Credit Rules, 2004.

Analysis: The disputed services comprised services used at sister units, employee-related welfare services such as insurance and rent-a-cab for employee trips, and services connected with marketing offices. The services were held to fall within the ambit of input service on the basis that they were connected with the assessee's business and employee cost had already been taken into account in the cost of production. The Tribunal also followed its own earlier decision in the assessee's case for the previous period, which had accepted credit on the same category of services.

Conclusion: CENVAT credit on the impugned services was admissible and the disallowance was unsustainable.

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