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2016 (12) TMI 1472 - AT - Service TaxCENVAT credit - erection, commissioning and installation agency service - construction of roads to contractors to make installation sites ready to carry out project - Held that: - Rule 3 of the CENVAT Credit Rules 2004, as claimed by the learned Authorised Representative, is the foundation for allowing of CENVAT credit on tax which is leviable under Finance Act, 1994. However, Rule 4 of the said Rules limit the taking of CENVAT credit to the amount including the service tax component paid to such service provider. The scheme of CENVAT credit is intended to prevent the cascading effect of tax. A tax, whether rightly or wrongly paid, needs to be set-off if the cascading effect is to be avoided and that is the rationale for the scheme of CENVAT credit to be operated on the invoice received from suppliers of goods or service and the invoice raised on recipient of the output service. There is no dispute on the authenticity of the invoice. The taking of CENVAT credit, therefore, cannot be faulted. The appellant held to be eligible to avail and utilize CENVAT credit of tax charged on the consideration paid for construction of roads to contractors of the appellant - appeal allowed - decided in favor of appellant-assessee.
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