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Facts
The Commissioner of Central Excise disallowed the total credit of Rs.21,360 of service tax paid on (i) telephone services (ii) vehicle maintenance (iii) fixed telephones, and (iv) courier agency and also upheld a penalty of Rs.10,000.
An appeal was filed only against the denial of credit of service tax paid on the telephone services as the same was eligible input service since used in connection with the activity of business of manufacture of final products.
Held
It was held that credit of service tax paid on the telephone services which is eligible input service since used in connection with the activity of business of manufacture of final products was admissible. The duty demand and the penalty to be requantified in light of the extended credit of service tax in respect of tax paid on telephone service.
