Input service credit: head-office administrative costs allocated to a manufacturing unit qualify for Cenvat credit when attributable.

Whether input service credit for chartered accountant, IT and manpower services incurred at a head office and allocated to a sole manufacturing unit is claimable under the Cenvat Credit regime; applying the contemporary expansive scope of "in relation to business" and precedents recognising attributable headquarters overheads, the tribunal held such administrative expenses, when properly allocated to manufacturing activities, fall within credit eligibility and the denial is set aside, with the appeal allowed and consequential relief granted.

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Issues: Whether credit of input services (chartered accountant services, IT services and manpower services) incurred at the head office and allocated to the manufacturing unit at Dahej for the period March 2014 to January 2015 can be denied under the Cenvat Credit regime.

Analysis: The Court examined the factual position that the costs were incurred at the head office and allocated to the sole manufacturing unit, and considered contemporaneous scope of the Cenvat Credit Rules which defined "in relation to business" expansively. The Court also considered and applied relevant precedent recognising that administrative or headquarters incurred overheads, when attributable to manufacturing activities, fall within credits available to the manufacturing unit.

Conclusion: Credit of the specified input services allocated from the head office to the Dahej manufacturing unit for the period March 2014 to January 2015 is allowable and the impugned denial is set aside; appeal allowed with consequential relief.

Ratio Decidendi: Where administrative expenses incurred at a head office are allocable to manufacturing activities of a unit, they fall within the ambit of "in relation to business" under the Cenvat Credit framework and are eligible for credit when so attributed.

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