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2017 (7) TMI 293 - AT - Service TaxBenefit of abatement - N/N. 1/2006-ST dated 1st March 2006 - commercial and industrial construction service - erection, commissioning or installation service - Held that: - It is common ground that the appellant had availed CENVAT credit which was reversed subsequently so that the eligibility for abatement of 67% is not denied. There can be no two opinions that an exemption notification, being a deviation, albeit authorised, from the legislative mandate to levy tax, must be subject to strict interpretation. Credit is merely an accounting acknowledgement of a fact and the sole test of compliance with scheme of CENVAT credit is sufficiency of balance of credit in the CENVAT credit account after all adjustments have been effected. To the extent that the assessee did not utilise credit, the availment of which is in dispute, there is no detriment to Revenue. Wrongful availment of CENVAT credit is visited with specific consequence under the Rules; that is a different cause of action leading to a different outcome which does not concern us in this dispute. There is no prejudice to Revenue by such erasure as it has not deprived the State of any tax that was due. On the contrary, denial of abatement would be an act of encroachment by taxing sale of goods which is beyond the scope of legislative authority. To avoid such encroachment, erasure of credit is the only option. There is no allegation that such erasure has lead to deficiency of available credit at any time. Erasure would thus be substantial compliance and hence denial of abatement in the impugned order is not tenable. Appeal allowed - decided in favor of appellant.
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