CENVAT credit reversal on common input services was treated as non-availment, preserving Notification No. 1/2006-ST benefit.

Reversal of CENVAT credit on common input services, together with interest, was treated as equivalent to non-availment of credit, so the objection to claiming Notification No. 1/2006-ST did not survive. The distinction drawn between inputs and input services was rejected, and reversal of the attributable credit cured the defect for purposes of the notification benefit. The assessee was therefore entitled to the exemption, and denial of the benefit was not sustainable.

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Issues: Whether reversal of CENVAT credit taken on common input services is to be treated as non-availment of credit so as to permit the benefit of Notification No. 1/2006-ST.

Analysis: The appellant had reversed the credit attributable to the common input services along with interest. The settled position applied by the Tribunal was that once the CENVAT credit on common inputs or input services is reversed, it is to be regarded as equivalent to non-availment of credit. The adjudicating authority's distinction between inputs and input services was not accepted, and the Tribunal followed its earlier view that reversal of the credit cures the objection to claiming the notification benefit.

Conclusion: The assessee was entitled to the benefit of Notification No. 1/2006-ST and denial of the benefit was not sustainable.

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