Yes, you can use service tax credit availed on Telephone for payment of excise duty, provided this telephones are within the factory premises or directly or indirectly related with manufacturing or ouput service.
14 June 2012
Telephone including mobile bills are eligible for credit.
The only questionswhich may arise if the same is used for persoanl purposes. If so then a %age of the credit maybe taken short as a measure of abundant caution.