Mobile telephone service tax credit remains admissible when used for output services or manufacturing, despite pending appeal without stay.

Credit of service tax paid on mobile telephone services was held admissible where the phones were used for providing output services or in relation to manufacture of finished goods. The Tribunal found no infirmity in the lower authorities' allowance of credit and rejected the Revenue's objection that a prior Tribunal ruling could be disregarded merely because an appeal had been filed against it without any stay. The Board's circular supporting admissibility was also noted, and the Revenue's challenge failed.

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Issues: Whether credit of service tax paid on mobile telephone services was admissible to the respondent.

Analysis: The Tribunal found no infirmity in the orders of the lower authorities allowing the credit. It held that the mere filing of an appeal against an earlier Tribunal decision, without any stay, was no ground to deny the benefit of the law declared by the Tribunal. The Tribunal also noted the Board's circular clarifying that credit of service tax paid on mobile telephone services is admissible when used for providing output services or in or in relation to manufacture of finished goods.

Conclusion: Credit of service tax paid on mobile phones was held admissible and the Revenue's challenge failed.

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