Input credit for R&D components denied where no proven manufacturing nexus linked laboratory use to final product manufacture.

Duty paid on components of a three wheeler vehicle used in the assessee's research and development department was not eligible as input credit because the materials were not shown to have been used in or in relation to manufacture of the final product. The asserted connection between laboratory use, research activity and eventual production was held too remote and unsupported by evidence. As no actual research outcome, emergent article or manufacturing nexus was established, the credit was denied and the claim failed.

---

---

Issues: Whether duty paid on components of a three wheeler vehicle used in the assessee's research and development department was eligible for credit as inputs used in or in relation to the manufacture of the final product.

Analysis: The claimed credit was denied because the components were not shown to have been used in or in relation to manufacture. The asserted link between laboratory use, research, and eventual use in production was found too remote and unsupported by evidence. No actual research outcome, emergent article, or manufacturing nexus was established.

Conclusion: The credit was not admissible and the appeal failed.

---