Cenvat credit reversal can restore eligibility for service tax abatement under the Mandap Keeper notification.

Reversal of the entire Cenvat credit with interest was treated as curing the initial availment for purposes of the abatement condition under Notification No. 01/2006-ST for Mandap Keeper service. The earlier taking of credit did not continue to disqualify the assessee once the disputed credit had been fully reversed, because the notification condition was considered satisfied at that stage. The abated rate of tax was therefore available, and denial of the exemption was set aside.

---

---

Issues: Whether reversal of the entire Cenvat credit with applicable interest entitled the appellant to the abatement under Notification No. 01/2006-ST dated 01.03.2006 for Mandap Keeper service.

Analysis: The appellant had taken Cenvat credit during the relevant period and was, at the time of adjudication, ineligible for the abatement. However, the entire disputed credit was subsequently reversed along with interest. On that basis, the earlier availment was treated as having no continuing effect, and the condition attached to the notification was considered satisfied. The notification benefit was therefore not to be denied merely because the credit had initially been taken, once it stood fully reversed.

Conclusion: The appellant was held eligible for the abated rate of tax under Notification No. 01/2006-ST, and the denial of the exemption was set aside.

---