Cenvat credit on input services cannot be denied without evidence or a valid statutory basis.

Cenvat credit could not be denied on air travel agency services absent any material showing personal use or employee consumption; business travel recorded in the books was not enough to treat it as non-business expenditure. Credit denial on works contract services also failed because the reverse charge notification cited applied to individuals, partnership firms and HUFs, not to a private limited company, and the valuation or abatement notification relied on was inapplicable on the facts. The construction service disallowance was unsustainable because the appellate authority introduced a new basis beyond the show-cause notice and original order. The credit disallowances were therefore set aside with consequential relief.

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Issues: Whether Cenvat credit could be denied on air travel agency services, works contract services, and construction services used by the appellant.

Analysis: The disallowance on air travel services was not supported by any material showing personal use or employee consumption, and business-related travel debited in the books could not be treated as non-business expenditure without proper basis. The denial under works contract service was unsustainable because the reverse charge notification relied upon applied to individuals, partnership firms and HUFs, not to a private limited company, and the valuation/abatement notification cited was also inapplicable to the facts. The disallowance relating to construction service was set aside because the appellate authority travelled beyond the scope of the show-cause notice and the original order by introducing a new basis not raised earlier.

Conclusion: The credit disallowances on all the disputed services were not sustainable.

Final Conclusion: The impugned order was set aside and the appellant was granted the consequential relief available in law.

Ratio Decidendi: Cenvat credit cannot be denied on a conjectural basis without supporting material, and a demand cannot be sustained on grounds that fall outside the show-cause notice; exemption or reverse-charge notifications must apply to the assessee on their terms before credit can be disallowed.

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