2010 (9) TMI 19

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....16(1) of CENVAT Credit Rules, 2004 stipulates that Board's Circular shall remain in force and valid for deciding the eligibility for Credit under CENVAT Credit Rules 2004. (2) Whether in the facts and circumstances of the present case the Hon'ble CESTAT was right in holding that the Respondents were entitled to avail Cenvat Credit on Service Tax paid on mobile phones services in terms of Rule 3 read with Rule 2(1) of the CENVAT Credit Rules, 2004 despite the Respondents not having established that the same was in relation to the business activity as envisaged under Rule 9(5) of the CENVAT Credit Rules, 2004. 2. By consent of learned Counsel for the parties, the appeal is taken up for final hearing. 3. The relevant facts are that - In 2006....

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....rovided. It is contended that by Central Board of Excise and Customs' Circular dated 20th June, 2003, the Board has clarified that the credit of Service Tax is not available on mobile phone. It is further contended that as per Rule 16 of CENVAT Credit Rules 2004, the Central Board of Excise and Customs' Circular dated 20-6-2003 in force at the commencement of 2004 Rules, shall be deemed to be valid and issued under the corresponding provisions of 2004 Rules. Accordingly, it is contended on behalf of the Revenue that Service Tax Credit could not be allowed on mobile service. 9. We see no merit in the above contentions. The dispute in the present case relates to availing Service Tax Credit on mobile phones supplied to the employees during th....