Per M.V. Ravindran : This stay application is filed by the Revenue against the impugned order on the ground that the Commissioner (Appeals) has erred in allowing the appeal filed by the respondent before him.

2. Heard both sides and perused the records.

3. After hearing both sides for some time, 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 findings of the Commissioner (Appeals) are very relevant, they are as under:

"I have gone through the records of the case and written submissions made by the assessees in reply to the show cause notice. I also heard them in person where they have reiterated their written submissions made on 07.11.2005. The issue relates to allowing of CENVAT Credit of the Service Tax on the following items during April, 2005.

Cell Phone Services:- The cell phone is supplied by M/s. Hindustan Coca-Cola Beverages Pvt. Ltd. to their employees for purpose of taking timely decisions and proper timely communications to their employees. In this connection the CBEC Board had issued a Circular No. 59/8/2003 (F.No. B3/7/2003) wherein it is clarified that Mobile phones are not covered inasmuch as the credit is allowed only on telephone sets installed in the business premises (Rule 3 (6) Service Tax Credit Rules, 2002). However, the new Cenvat Credit Rules, 2004 have come into effect from 10.09.2000 by superceding the Cenvat Credit Rules, 2002 and the Service Tax Credit Rules, 2002. Under Rule 3 of new Rules, Cenvat Credit has been allowed to the provider of taxable service and manufacture of final product on any input service received by them on or after the 10th day of September, 2004. In fact it is correct that the Board's circular about non availability of credit of service tax on mobile phone has not been withdrawn, but it has lost its relevance since circular contrary to any law is void. Legal position 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 (1) 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 competition in the market and also to facilitate timely decisions and proper timely communications so as to improve their sale activity. Further the assessees also have furnished the bills relating to the mobile phones provided to their employees and the payments made towards these bills (copy of the ledger) which show the bills of the mobile phones are in the name of the Company and also the payments were made by the company i.e., M/s. Hindustan Coca Cola Beverages Pvt. Ltd. Therefore agree with the assessee's contention and hold that they are eligible for the credit of service tax on these items.

Burglary Insurance services: Burglary insurance policy is intended to cover the risk of loss or damage to the property insured by theft following upon actual forcible and violent entry into the