Input credit of service tax - mobile phone service

[Asked by Guest]

Hi, My query relates to the credit availed on the service tax paid for mobile phone service (input service. The Dept. of Central Excise has objected to the availment of credit on service tax paid on account of mobile phone service saying that the Board's circular has clarified on this issue and the same cannot be availed as it is not a fixed line telephone service at he premises of the assessee. can anyone throw light onthis issue whether the stand of the Dept. is coorect?

AI Summary

Cenvat credit for mobile phone services permitted under CENVAT Credit Rules, subject to standard conditions for input service credit.
The query concerns admissibility of Cenvat credit for service tax on mobile phone services. Earlier administrative guidance under Service Tax Credit Rules, 2002 restricted credit to telephone sets installed in business premises and excluded mobile phones, but a tribunal decision broadly construed "cellular phone." With repeal of the 2002 rules and introduction of the CENVAT Credit Rules, 2004, there is no premises-installation restriction; consequently, mobile phone service tax is treatable as eligible for Cenvat credit subject to the standard statutory conditions for input service credit.