2014 (3) TMI 380 - AT - Central Excise

Duty demand - Availment of CENVAT Credit on inputs used by the Job worker - Held that - CENVAT credit of duty paid on inputs used in manufacture of product cleared without payment of duty by jobworker for further utilization in manufacture of final product, which are cleared on payment of duty by principal manufacturer, the jobworker is not required to reverse input credit. assessee is not required to reverse CENVAT credit on inputs which has gone into manufacture of final product by jobworker which were ultimately suffered duty at the end of principal manufacturer - Following decision of M/s Sterlite Industries (I) Ltd. 2008 (8) TMI 783 - BOMBAY HIGH COURT - Decided against Revenue.

Summary

Issues:
1. Appeal against impugned order by Revenue.
2. Cross objection filed by respondent.
3. Reversal of CENVAT credit on inputs used in jobwork goods.
4. High Court's decision on CENVAT credit reversal.

Analysis:

1. The Revenue appealed against the impugned order, while the respondent filed a cross objection. The case involved the manufacturing of cast articles of iron and steel, along with jobwork activities where certain inputs were used, and credit was availed. The jobwork goods were cleared to the principal manufacturer without duty payment, leading to a demand notice by the Revenue proposing duty, interest, and penalty. The Commissioner (Appeals) set aside the order based on a Tribunal's decision in a previous case. The Revenue challenged this based on the pending challenge to the Tribunal's decision before the High Court.

2. The Revenue contended that the Tribunal's decision in the Sterlite Industries case was under challenge before the High Court, thus the impugned order should be set aside. However, the respondent argued that the High Court had already dismissed the Revenue's appeal in the Sterlite Industries case. After hearing both sides, the Tribunal analyzed the situation in detail.

3. The Tribunal referred to the High Court's decision in the Escorts Ltd. case, where it was held that a jobworker is not required to reverse input credit if the final product clears duty at the end of the principal manufacturer. Citing the Sterlite Industries case, the Tribunal found that the issue had been settled by the High Court's judgment, and since the Revenue's appeal had already been decided by the High Court, there was no merit in the Revenue's current appeal. Consequently, the impugned order was upheld, and the Revenue's appeal was dismissed. The Cross Objection was also disposed of accordingly.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Tribunal's decision based on legal precedents and interpretations.