2004 (3) TMI 589 - AT - Central Excise

Summary

Issues: Modvat credit availability on inputs used for job work basis products

Analysis:
The case involved a dispute regarding the Modvat credit of duty in respect of inputs used by the appellants in the manufacture of products on job work basis. The appellants were engaged in manufacturing products both on their own account and on job work basis. The main raw material for job work products was supplied by the principal manufacturer, and the appellants were not availing any Modvat credit on it. However, they were using other inputs common for products manufactured on their behalf and as job worker.

The Revenue contended that since the final products manufactured on job work basis were cleared without paying duty under specific notifications, the Modvat credit on such inputs should not be available to the appellants. On the contrary, the appellants argued that the final products were ultimately cleared by the principal manufacturer after paying duty, and thus, the credit availed by them was rightfully used for duty payment on the final products.

After hearing both parties, the Tribunal found that the issue had already been settled in favor of the appellants in a previous decision of the Tribunal in the case of Jindal Polymers v. CCE, Meerut-III. The Tribunal noted that the earlier decision had considered relevant precedent decisions and, therefore, followed the same ratio. Consequently, the Tribunal set aside the impugned order and allowed the appeal, granting consequential relief to the appellants.