Cenvat credit on mobile phone service tax allowed where the rules contain no express prohibition.

Service tax credit on mobile phone services was treated as admissible under the Cenvat Credit Rules, 2004 where no express prohibition applied. The appellate view followed Tribunal precedent that output service providers and manufacturers could avail such credit, and the contrary disallowance and penalty by the original authority were not sustained. The reasoning turned on the absence of any specific bar in the credit rules and the lack of contrary material to displace the precedent-based position.

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Issues: Whether credit of service tax paid on mobile phone was admissible under the Cenvat Credit Rules, 2004.

Analysis: The original authority had disallowed credit and imposed penalty, but the appellate authority had allowed the claim by following Tribunal precedent holding that service tax paid on mobile phone is available as credit to output service providers and manufacturers in the absence of any express prohibition under the Cenvat Credit Rules, 2004. No contrary reason was shown to disturb that view.

Conclusion: Credit of service tax paid on mobile phone was admissible and the Revenue's appeal was rejected.

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