CENVAT credit reversal on input services was not required when imported goods were sold as such, absent an express rule.

CENVAT credit of service tax paid on CHA services and commission agent services was not required to be reversed where imported goods were sold as such, because the governing rules did not expressly provide for reversal of input-service credit in that situation. The Tribunal applied the input, input service, credit and reversal provisions, together with the principle that a taxing provision cannot be extended by implication. On that basis, the demand and penalty on the stated ground were unsustainable, and the assessee succeeded with consequential relief.

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Issues: Whether CENVAT credit of service tax paid on CHA services and commission agent services was required to be reversed when imported goods were sold as such by the assessee.

Analysis: The imported goods were sold as such, and the dispute turned on whether the CENVAT scheme required reversal of credit relatable to input services when the goods themselves were not used in manufacture. The Tribunal relied on the governing rules defining input, input service, CENVAT credit, and the specific reversal provision, along with the principle that a taxing provision cannot be extended by implication. On the basis of the cited High Court view, the absence of an express provision requiring reversal of input-service credit for such sales was ative.

Conclusion: The credit was not required to be reversed, and the assessee succeeded on the issue.

Final Conclusion: The demand and penalty could not be sustained on the stated ground, and the appeal succeeded with consequential relief.

Ratio Decidendi: In a taxing scheme, reversal of credit can be demanded only when the governing rule expressly provides for it; an omitted category cannot be introduced by analogy or inference.

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