2009 (3) TMI 142

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....th sides and perused the records. 3. After hearing both sides for sometime, we find that the issue involved being in a narrow compass, the appeal itself could be disposed of at this juncture. After dismissing the stay application filed by the revenue, we take up the appeal for disposal. 4. The issue involved in this case is that the respondent had availed Cenvat credit on the Service Tax paid by them to the telephone companies, in respect of the mobiles given to their employees. The revenue objected to such credit being taken and issued a show-cause notice. The Adjudicating Authority confirmed the demand and also imposed penalties, besides demanding interest. On an appeal, the learned Commissioner (Appeals) set aside the same. The fin....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....osition about circular is very clear that the circular can fill up the gaps in rules but cannot take the place of the rule. However whether circular in reference is withdrawn or not, the availability of credit of service tax on mobile phone is out of any doubt so long as the service is coming under the definition of input service. Rule 2(l) of CENVAT Rules provides that "Input service" means any service used by the manufacturer, whether directly or indirectly, in or in relation to manufacture of final products and clearance of final products from the place of removal and includes services used in relation to advertisement and sales promotion. In the instant case the assessees have provided mobile phones to their employees to meet competitio....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Fidelity Insurance This is qua-insurance against loss caused by the dishonesty or non-performance of an employee of the insured. The assessees' contention that they being a part of a multinational good and is multi-locational entity and the business is being carried on by them at a large scale all across the country with a turnover around 1700 crores and in order to cover the risk of laws due to infidelity they have taken up fidelity insurance and it has direct relation to their business and therefore well covered under the inclusive definition of input service being an activity related to business is not correct. It is also the duty of the assessee as an employer to safe guard and to be vigilant on performances of all employees and ....