By TIOL News Service

CHENNAI, SEPT 21, 2015: THE respondents availed credit on inputs, namely, 'plastic components' and cleared them to their job worker for painting, under challans in terms of Notification No.214/86 dated 25.03.1986. The job worker returned the inputs after painting, on payment of duty under invoices, instead of returning the goods under a challan specified under the notification. The appellants took credit on the 'plastic components' cleared by them as well as on the processed inputs, which was objected to by the department on the ground that credit had been availed twice. The assessee got a favourable order in Tribunal. So, revenue is in appeal before the High Court.

After hearing both sides, the High Court held:

What happened in this case was that the first respondent/assessee handed over plastic materials during the period from July 2006 to December 2006 to a Company by name Nypro Forbes Products Private Limited for carrying out certain job works. The goods were handed over after availing credit for inputs, but, not actually paying duty. The Company which undertook the job work, while returning the goods, after carrying out the job work, raised invoices, for amounts including the duty that they paid. Even according to the Department, the job worker was not liable to make payment of duty. But, since the duty was paid by the job worker and also claimed from the first respondent/assessee, the first respondent/assessee claimed credit.