2007 (5) TMI 399 - AT - Central Excise

Summary

Issues involved: Denial of credit in respect of service tax paid on Mobile Phone Bills based on Board Circular No. 59/8/2003-S.T.

Summary:
The appellant filed an appeal against the impugned order denying credit for service tax paid on Mobile Phone Bills, citing Board Circular No. 59/8/2003-S.T. The appellant argued that they are entitled to credit u/s Cenvat Credit Rules, 2004 as the service tax on telephone bills qualifies as an input service. They relied on a Tribunal decision allowing such credit. The Revenue contended that credit can only be availed if the input service is used in or in relation to the manufacture of the final product or its clearance, which was not proven in this case. Despite the Board Circular, the Tribunal found no prohibition on claiming credit for service tax on mobile phone bills. The matter was remanded to the adjudicating authority for reconsideration and a fresh decision after providing the appellants with a hearing opportunity. The appeal was allowed by way of remand.