Abatement under service tax exemption cannot be denied when the same controversy was already decided in the assessee's favour.

Denial of abatement under the service tax exemption notifications for alleged availing of Cenvat credit on input service was held unsustainable where the same controversy had already been decided in the assessee's own case for an earlier period. The High Court had set aside the Tribunal's earlier view and held that the demand, as framed, could not be sustained; that ruling was treated as fully applicable because the later dispute involved the same facts and reasoning, differing only by period. The consequential differential duty demand therefore could not survive, and relief was granted to the assessee.

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Issues: Whether denial of abatement under the service tax exemption notifications on the ground that Cenvat credit had been availed on input service was sustainable, and whether the consequential differential duty demand could survive.

Analysis: The dispute turned on the same legal question that had already been decided in the assessee's own earlier matter for a prior period. The earlier decision had been taken in appeal to the High Court, which set aside the Tribunal's view and held that the demand could not be sustained in the manner in which it had been raised. Since the present case involved the same controversy and only the period differed, the earlier High Court ruling was treated as fully applicable. On that basis, the denial of abatement and the resultant demand were held to be unsustainable.

Conclusion: The demand was not sustainable and the assessee was entitled to relief.

Ratio Decidendi: Where the same exemption controversy has already been concluded by the High Court in the assessee's own case, the later period's demand cannot survive if it is founded on the same reasoning and facts.

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