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CENVAT - Appellant clearing jobworked goods without payment of duty to principal manufacturer - Input services availed cannot be denied: CESTAT

By TIOL News Service

MUMBAI, DEC 28, 2014 : THE appellant manufactures excisable goods and also undertakes job work for their principal manufacturers.The goods manufactured independently were cleared on payment of duty but in respect of the job worked goods cleared to the principal manufacturer, no duty has been charged by the appellant.

Since the appellant was availing CENVAT credit on the input service availed by them, Revenue is of the view that they are not entitled to take input service credit attributable to job work goods.

The credit was denied by the lower authorities and, therefore, the appellant is before the CESTAT.

The appellant submitted that similar issue came up before the Tribunal in the case of Aurangabad Auto Engg Pvt Ltd vs.CCE, Aurangabad - 2011-TIOL-1010-CESTAT-MUM wherein relying upon the decision of the Tribunal Larger Bench in the case of Sterlite Industries (I) Ltd vs. CCE - 2005-TIOL-305-CESTAT-MUM-LB credit was allowed.

The AR relied upon the decision of the Tribunal in Royal Touch Aluminium Pvt Ltd vs CCE - 2012-TIOL-1573-CESTAT-AHM to say that the appellant is not entitled to take credit.

The Bench observed -

"6.The main argument of the learned A.R.is on the admissibility of credit on the service tax paid for job worker service but in that case this Tribunal has not held that job worker is not entitled to take credit but in case if the job worker has not taken exemption under Notification No.8/2005-ST in that case the principal manufacturer is entitled to take Cenvat credit of input services.Therefore, the facts are not relevant to the facts of the present case but the facts of the case in Aurangabad Auto Engg Pvt Ltd (supra) are identical to the facts of this case wherein the Tribunal held that the appellant is entitled to Cenvat Credit.Therefore, relying upon the decision of the decision in Aurangabad Auto Engg Pvt Ltd (supra) I hold that in this case also the appellant is entitled to Cenvat credit…."

The appeal was allowed with consequential relief.

(See 2014-TIOL-2622-CESTAT-MUM)


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