2019 (9) TMI 1492 - AT - Central Excise

CENVAT Credit - inputs received for job work - Rule 4(5)(a) of Cenvat Credit Rules 2004 - HELD THAT - The issue has been considered at length by the Larger Bench of this Tribunal in Sterlite Industries case 2004 (12) TMI 108 - CESTAT MUMBAI (LB) in the context of old provisions which was later upheld by the Hon ble Bombay High Court. No contrary decision has been placed by the Revenue. The proviso to Rule 4(5)(a) is in pari materia with the provision discussed in the said judgment hence the ratio laid down thereunder is squarely applicable to the present case. Another argument advanced on behalf of the Revenue is that in the present case the goods cleared by the appellants to M/s. Maneesh Pharma Pvt. Ltd. were ultimately exported and therefore the principle of law settled in Sterlite Industries (I) Ltd. s case is not applicable. There are no merit in the said contention inasmuch as the ratio laid down by the Larger Bench of the Tribunal is applicable to the present case also even if the goods were ultimately exported when one takes into consideration the provisions contained in Rule 6(6) of Cenvat Credit Rules 2004. In the result the appellants are eligible to the Cenvat credit amount availed. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Admissibility of Cenvat credit on inputs received for job work under Rule 4(5)(a) of Cenvat Credit Rules, 2004.
- Entitlement to credit of duty paid on inputs received under Rule 4(5)(a) of Cenvat Credit Rules, 2004.

Analysis:
1. Admissibility of Cenvat Credit on Inputs for Job Work:
The appellants, engaged in manufacturing pharmaceutical products, availed Cenvat credit on inputs received for job work from a supplier. The issue arose when a show cause notice was issued for the recovery of the Cenvat credit availed. The appellant contended that the issue of admissibility of Cenvat credit on such inputs is covered by a judgment of the Larger Bench of the Tribunal and upheld by the Bombay High Court. The appellant also highlighted that they had taken suo motu credit of the reversed amount before filing necessary returns, considering it a book adjustment. The appellant referred to judgments from various High Courts to support their argument. The Revenue reiterated the findings of the Commissioner.

2. Entitlement to Credit of Duty Paid on Inputs Received:
The key issue under consideration was whether the appellants were entitled to credit of duty paid on inputs received under Rule 4(5)(a) of Cenvat Credit Rules, 2004. The Tribunal analyzed the relevant provisions and previous judgments, particularly the one by the Larger Bench of the Tribunal in a similar context. The Tribunal found that the proviso to Rule 4(5)(a) aligns with the provision discussed in the earlier judgment, making the ratio laid down in that judgment applicable to the present case. The Revenue argued that since the goods were ultimately exported, the principle of law from the previous case did not apply. However, the Tribunal disagreed, stating that even in cases of export, the provisions in Rule 6(6) of Cenvat Credit Rules, 2004 support the appellants' entitlement to the Cenvat credit amount availed. Consequently, the appeals were allowed with consequential relief, if any, as per law.

This detailed analysis of the judgment addresses the issues of admissibility of Cenvat credit on inputs for job work and the entitlement to credit of duty paid on inputs received, providing a comprehensive overview of the legal reasoning and conclusions reached by the Tribunal.