Cenvat credit on mobile phones used for output services is admissible where used in relation to business.

Cenvat credit on service tax paid for mobile phones used by a service provider to render output service was admissible because the phones were treated as input service when used in relation to the output service and in connection with the business. The connections stood in the service provider's name, the departmental circular did not prohibit such credit, and prior tribunal authority supported admissibility. On that basis, the Revenue's appeals failed.

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Issues: Whether Cenvat credit of service tax paid on mobile phones used by the service provider for rendering output service was admissible.

Analysis: The relevant Cenvat Credit Rules treated as input service any service used by a provider of taxable service for providing output service. The mobile connections stood in the name of the respondent, and there was no dispute that they were used in relation to the output service and in connection with the business. The departmental circular relied upon did not bar credit on mobile phones used by the service provider, and prior tribunal authority had already recognised admissibility of such credit.

Conclusion: Cenvat credit on service tax paid on mobile phones was admissible, and the Revenue's appeals failed.

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