Cenvat credit on travel and hotel es remanded for fresh scrutiny of input service eligibility and supporting documents

Denial of Cenvat credit on tours, travel and hotel expenses was questioned on the basis that the definition of input service under the Cenvat Credit Rules, 2004 had been read too narrowly, despite later legal developments expanding its scope. The appellant had filed bills, invoices, debit notes and explanatory material linking the expenditure to business travel for output services, so the absence of a Chartered Accountant certificate was treated as corroborative rather than mandatory. As the record required closer factual scrutiny than was appropriate at the second appellate stage, the matter was remanded to the original adjudicating authority to re-decide admissibility of the credit on the existing documents.

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Issues: Whether the denial of Cenvat credit on tours and travel and hotel expenses was sustainable on the material before the appellate authority, and whether the matter should be remanded for fresh adjudication.

Analysis: The lower authorities had proceeded on an overly restrictive understanding of the definition of input service under the Cenvat Credit Rules, 2004 and had not given due effect to the later position of law expanding the scope of the definition. The record showed that the appellant had produced bills, invoices, debit notes and sample explanations linking travel and hotel expenditure to business travel undertaken for output services. In these circumstances, a detailed scrutiny of the voluminous documents at the second appellate stage was considered inappropriate, and the absence of a Chartered Accountant certificate was treated only as a possible corroborative circumstance, not as a mandatory legal requirement.

Conclusion: The matter was remanded to the original adjudicating authority for re-adjudication of the admissibility or inadmissibility of the Cenvat credit on the basis of the documents already produced.

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