2018 (8) TMI 1176 - AT - Service Tax

Commercial or Industrial Construction service - Benefit of abatement under N/N. 01/2006-ST dated 01.03.2006 - denial of benefit on the ground that they have availed CENVAT credit hence, they have contravened the condition of notification - Held that - The appellant though availed CENVAT credit in respect of input services but the same was reversed along with interest before issue of show cause notice - Tribunal in the case of M/S PUNJAN BUILDERS VERSUS COMMISSIONER, CENTRAL EXCISE & SERVICE TAX, VADODARA-II 2015 (12) TMI 490 - CESTAT AHMEDABAD has held that reversal of CENVAT Credit does not absolve from violation of the conditions of notification. Benefit of abatement allowed - appeal allowed - decided in favor of appellant.

Summary

Issues involved:
1. Availment of Cenvat credit and denial of exemption under Notification No. 01/2006-ST.
2. Compliance with conditions of notification and reversal of Cenvat credit.
3. Interpretation of legal provisions regarding availing benefits under notification.
4. Application of judgments in similar cases to determine liability.

Analysis:

1. The case involved the appellant engaged in providing Commercial or Industrial Construction services who availed abatement under Notification No. 01/2006-ST but also availed Cenvat credit for a small amount. The department denied the exemption due to the Cenvat credit availed. The appellant reversed the credit along with interest before the show cause notice was issued.

2. The advocate for the appellant argued that since the credit was reversed, they should be entitled to the exemption notification. The Tribunal referred to a previous case where a similar situation was addressed, emphasizing the importance of reversing wrongly availed credits promptly upon realization.

3. The Tribunal examined the findings of the Joint Commissioner, noting that the appellant had contravened provisions but had rectified the error by reversing the Cenvat credit with interest. The Tribunal cited the Supreme Court's decision in Chandrapur Magnet Wires case, emphasizing the need for strict compliance with notification conditions, even if the credit is reversed later.

4. Referring to past judgments, the Tribunal highlighted the importance of timely reversal of credits and strict compliance with notification conditions. The Tribunal set aside the impugned order and allowed the appeal based on the precedent set by previous cases with similar facts. The decision was made in line with the principles established in the Chandrapur Magnet Wires case and other relevant legal precedents.

This detailed analysis of the judgment showcases how the Tribunal interpreted the law, considered past judgments, and applied legal principles to decide on the issues raised in the case.