CENVAT credit on CHA services allowed, but residential telephone credit denied absent exclusive business use.

CENVAT credit was treated as admissible on CHA services used for clearance of import and export consignments, consistent with prior cases recognising such input services as business-related. Credit was denied on service tax paid for a telephone installed at an executive's residence because exclusive business use was not shown and the clarification limited credit to telephones installed in business premises. The result was partial acceptance of the assessee's claim: input service credit was allowed for CHA services, but disallowed for the residential telephone connection.

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Issues: (i) Whether CENVAT credit of service tax paid on CHA services used for clearance of import and export consignments was admissible; (ii) Whether CENVAT credit of service tax paid on telephone installed at the residence of the executive was admissible.

Issue (i): Whether CENVAT credit of service tax paid on CHA services used for clearance of import and export consignments was admissible.

Analysis: The input service credit on CHA services was accepted as eligible. The departmental representative also fairly conceded that such services had been allowed in several cases and the position had attained finality.

Conclusion: The credit on CHA services was admissible and the disallowance was set aside in favour of the assessee.

Issue (ii): Whether CENVAT credit of service tax paid on telephone installed at the residence of the executive was admissible.

Analysis: The telephone at the executive's residence was not shown to be used exclusively for business purposes. The circular clarified that credit was available only for telephones installed in business premises, and not for residential telephones.

Conclusion: The credit on telephone service was not admissible and the disallowance was upheld against the assessee.

Final Conclusion: The appeal succeeded only to the extent of CHA service credit and failed in respect of the telephone installed at the executive's residence, resulting in a partial allowance of the assessee's claim.

Ratio Decidendi: CENVAT credit is available for input services used in the course of business, but credit on a telephone installed in residential premises is not admissible unless its exclusive business use is established and the governing clarification permits such credit only in business premises.

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