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2020 (12) TMI 1015 - CESTAT NEW DELHIAdmissibility of abatement under the Notification dated March 1, 2006 - impugned order has denied the abatement availed by the appellant during the month of March, 2006 on the ground that the appellant availed and utilized credit for providing the output services of CIC for the month of March 2006, which is not permitted under the Notification dated March 1, 2006 - HELD THAT:- CENVAT credit availed by the appellant of the service tax paid by the service providers for the services rendered prior to 01.03.2006 cannot be faulted with as availment of CENVAT credit by service recipient is subject to the condition that payment for such service rendered as the provisions. Undisputedly, in this case the appellant had paid the service providers / settled the service providers bill subsequently from March 2006 for the service rendered prior to 01.03.2006 and has correctly claimed the legitimate CENVAT credit available. The Commissioner has held in the impugned order that the agreement between the Principles and the Consortium Members is a composite contract for provision of services and supply of goods. According to the appellant, the composite contract has the essential character of a “works contract”, as it involves both supply of goods as well as provision of services. Hence, the various services provided by the appellant under the agreement will more appropriately being classified under ‘works contract’ service which became taxable w.e.f June 1, 2007 - The impugned order also records a finding that the contract involves provision of services as well as supply of goods. Thus, the demand raised for a period prior to June 1, 2007 is not sustainable. Even for the period post June 1, 2007, the demand cannot be sustained as it has been raised under CIC and ECI and not under “works contract” service. The demand raised under CIC and ECI for the period July 1, 2007 and post June 1, 2007 cannot be sustained - Appeal allowed - decided in favor of appellant.
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