Cenvat credit on mobile-phone service tax depends on proving use for output service or manufacture before allowance.

Cenvat credit on service tax paid for mobile phones provided to company officers is admissible only if the phones are shown to have been used for providing output service or in relation to manufacture of finished goods. As no proof of such nexus had been produced before the lower authority, the factual basis for the claim required verification. The matter was remanded to the original authority for reconsideration, and credit is to be allowed if eligibility is established in accordance with law.

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Issues: Whether Cenvat credit of service tax paid on mobile phones provided to officers of the company was admissible, and whether the claim required fresh verification in light of the Board circular and the record.

Analysis: The claim for credit depended on whether the mobile phones were used for providing output service or in or in relation to manufacture of finished goods. The record noted that no proof had been produced before the lower authority to establish such use. The Board circular and the cited Tribunal decisions indicated that credit could be admissible if the prescribed nexus with output service or manufacture was established, so the factual foundation had to be verified before granting relief.

Conclusion: The matter was remanded to the original authority for reconsideration and verification, with credit to be granted if the assessee was found eligible in accordance with law.

Final Conclusion: The denial of credit was not finally sustained, and the assessee obtained an opportunity to establish eligibility before the original authority.

Ratio Decidendi: Cenvat credit on mobile-phone service tax is admissible only upon proof that the phones were used for providing output service or in or in relation to manufacture, and the claim must be verified on facts before allowance.

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