Dual benefit under service tax exemptions was not proved, so the demand could not be sustained.

A service tax demand based on alleged dual benefit under Notification No. 1/2006-ST and Notification No. 12/03-ST was not sustained because the record did not prove that both notifications had actually been availed. The ST-3 return was found to reflect only confusion between the terms "abatement" and "exemption", and the disclosed figures did not establish double benefit. The absence of any allegation or evidence of Cenvat credit having been taken on inputs, capital goods, or input services further undermined the demand. With no material showing inconsistency with the exemption conditions, the allegation of wrongful dual benefit failed.

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Issues: Whether the respondent had wrongly availed dual benefit of abatement/exemption under Notification No. 1/2006-ST and Notification No. 12/03-ST, so as to justify the demand of service tax.

Analysis: The demand was founded on the allegation that the respondent had taken benefit under both notifications, but the record disclosed no supporting evidence to show that Notification No. 12/03-ST was actually availed. The adjudicating authority had found that the ST-3 return reflected confusion between the expressions "abatement" and "exemption" and that the figures disclosed did not establish double benefit. The Tribunal also noted the absence of any allegation that Cenvat credit on inputs, capital goods, or input services had been taken, and found no material to show that the respondent had claimed or issued invoices in a manner inconsistent with the exemption conditions.

Conclusion: The allegation of dual benefit was not established, and the service tax demand could not be sustained.

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