Service Tax Credit allowed on Mobile Phone used for Business Purpose

It has been recently held by Honorable CESTAT, that credit of service tax is allowed on mobile phones used for business purposes. Earlier, credit of service tax on mobile bills were being disallowed as the same were not installed in the business premises of the business. However, the same has now been clarified that service tax credit shall be allowed on any mobile phone which is used for the purpose of business of the assessee. Find below the text of the judgement.


URSS Tech Service Pvt. Ltd.


Commissioner of Central Excise, Jaipur

Final Order No. 138/2009-SM(BR)(PB), dated 3-2-2009 in Appeal No. E/1793/2007-SM


I have heard both sides on the above appeal against the order of Commissioner (Appeals) rejecting the refund claim filed for refund of service tax on the ground that service tax credit was not admissible to the appellant in respect of the mobile phones as such phones were not installed in their premises.

2. The issue in the case stands settled by the decision of the Hon’ble Gujarat High Court in Commissioner of Central Excise Vs Excel Crop Care Ltd. (12) STR 436 (Guj.), holding that, the ground for denial of credit, namely, that mobiles phones were not installed in factory premises, is not germane to the relevant provisions of law and that credit is admissible unless shown that use of the cell phone was not relatable to the business.  In the present case, the only ground on which it was proposed to deny Cenvat Credit on Service Tax is the non-installation of mobile phones in the appellant’s premises.  Neither is there any ground in the notice nor any finding that the calls made from the mobile were not relatable to the business of the assessee.  In this view of the matter, the judgment of the Hon’ble Gujarat High Court squarely covers the issue in favour of the appellant.  Following the same, I set aside the impugned order and allow the appeal.


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