Project-wise CENVAT credit bar applies to exemption claims under Notification No. 1/2006-ST, subject to factual verification.

The exemption under Notification No. 1/2006-ST operates project-wise: a service provider may claim the benefit for a particular project if no CENVAT credit was taken for that project, even if credit was availed in relation to other non-covered projects. Eligibility therefore depends on whether the relevant project itself satisfied the no-credit condition. As the record did not conclusively show that the credit was confined to projects not claiming the exemption, factual verification was necessary before the demand could be sustained.

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Issues: Whether the assessee could claim the benefit of Notification No. 1/2006-ST for a particular project even though CENVAT credit was availed in respect of other projects, and whether the factual claim that such credit was confined to non-exempt projects required verification.

Analysis: The condition in the notification operates project-wise and applies only to the taxable service for which the benefit is claimed. The assessee is not barred from availing CENVAT credit in relation to other projects where the notification is not invoked. The entitlement to abatement therefore turns on whether, for the relevant project, no CENVAT credit was taken. Since the record did not conclusively establish that the credit was confined to projects not claiming the notification benefit, factual verification was necessary.

Conclusion: The assessee was entitled to the benefit of the notification if no CENVAT credit was availed for the concerned project, but the matter had to be verified on facts.

Final Conclusion: The demand could not be finally sustained on the existing record and the matter was sent back for factual verification and fresh decision in accordance with the stated legal position.

Ratio Decidendi: The bar on CENVAT credit in the exemption notification is project-specific and does not require uniform treatment across all contracts executed by the assessee.

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