Cenvat credit on mobile phones depends on actual business use and fresh verification before allowance.

Cenvat credit on service tax paid for mobile phones supplied to company officers was stated to be admissible only where the phones were used for providing output service or in relation to manufacture of finished goods, as reflected in the Board's circular from 10-9-2004. The record did not establish such use, so the claim required factual verification before credit could be granted. The matter was therefore remanded to the original authority for reconsideration and fresh adjudication in accordance with the circular and applicable law.

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Issues: Whether Cenvat credit of service tax paid on mobile phones provided to company officers was admissible, and whether the matter required verification of actual use before grant of credit.

Analysis: The Board's circular stated that, from 10-9-2004, credit of service tax paid on mobile telephone service would be admissible if the phones were used for providing output service or in or in relation to manufacture of finished goods. The record, however, did not establish such use. The claim therefore depended on factual verification by the departmental authorities before any credit could be allowed.

Conclusion: The claim was not finally allowed or rejected on merits. The matter was remanded to the original authority for reconsideration and fresh adjudication in accordance with the circular and the applicable law.

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