2016 (11) TMI 635 - AT - Central Excise

CENVAT credit - job work - whether the appellants are eligible to take credit of service tax paid by job worker - Held that - The appellants had availed the credit of the service tax paid by the job worker, and further processed the goods and cleared the final goods on payment of central excise duty. Therefore, it is not in doubt that the service tax has been paid in relation to manufacture of the goods - CENVAT credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues involved: Eligibility of appellants to take credit of service tax paid by job worker.

Analysis:
The issue in this appeal revolves around the eligibility of the appellants to claim credit for the service tax paid by a job worker. The appellant's counsel argued that this issue has been settled in their favor by various decisions of the Tribunal, including the case of India Vision Satelite Communications Ltd. vs. Commissioner of Central Excise, Customs and Service Tax, Cochin [2015 (39) S.T.R. 684 (Tri.-Bang.)]. On the other hand, the Authorized Representative for Revenue reiterated the findings of the Commissioner (Appeals) mentioned in the order-in-appeal.

Upon careful consideration of the arguments presented by both sides and a thorough review of the records, the Tribunal observed that the job worker had indeed paid the service tax for processing the goods, which were then sent to the appellants for further processing. The appellants had availed the credit for the service tax paid by the job worker and subsequently processed the goods, clearing the final products after paying central excise duty. The Tribunal noted that the payment of service tax was directly related to the manufacturing process of the goods. The Tribunal found support in previous decisions on similar issues, such as Commissioner of Central Excise, Mumbai-III vs. DIL Ltd. [2008 (9) S.T.R. 411 (Tri.-Mumbai)], Spic (HCD) Ltd. vs. Commissioner of Central Excise, Chennai [2006 (201) E.L.T. 386 (Tri.-Chennai)], and India Vision Setelite Communications Ltd. The Tribunal also referenced the decision of the Apex Court in Commissioner of Central Excise & Customs vs. MDS Switchgear Ltd. [2008 (229) E.L.T. 485 (S.C.)].

Consequently, the Tribunal concluded that the impugned order could not be upheld and was set aside. The appeal was allowed in favor of the appellants. The order was dictated and pronounced in an open court setting.