Mobile phone service tax credit is admissible when phones support manufacturing operations, despite incidental personal use.

Credit of service tax on mobile phone services was held admissible where the phones stood in the company's name and were used by employees for work connected with manufacture of final products. The Board's circular and prior decisions supported the view that input service credit is available when the service is used in or in relation to manufacture, and incidental personal use does not by itself defeat eligibility. On the facts, the phones were treated as company phones used for business purposes, so the Revenue's challenge failed.

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Issues: Whether credit of service tax paid on mobile phone services was admissible where the phones stood in the company's name and were used by employees in relation to the manufacture of final products, notwithstanding alleged incidental personal use.

Analysis: The issue had already been considered in earlier decisions relied upon by the parties and by the same Bench in a connected matter. The Board's circular clarified that credit on mobile phones is available when the service is used in or in relation to manufacture of the final products. On the facts, the mobile phones were treated as company phones used for work connected with manufacture, and incidental personal use did not disqualify the credit claim.

Conclusion: The credit on service tax paid on mobile phone services was admissible, and the Revenue's challenge failed.

Ratio Decidendi: Credit of service tax on mobile phone services is available where the phones are used in or in relation to the manufacture of final products, and incidental personal use does not by itself defeat eligibility.

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