2017 (7) TMI 888 - AT - Central Excise

CENVAT credit - job-work - transfer of credit - whether the appellant is entitled to CENVAT Credit for the inputs which have been purchased initially by the job-worker and utilized within the job-workers premises for the product of the appellant and later sold to the appellant? - Held that - the matter is covered by the Tribunals decisions in the cases of Flex Industries Ltd. Vs. Commissioner of Central Excise 2006 (2) TMI 439 - CESTAT, NEW DELHI , where it was held that since the job workers had used duty paid inputs for the processing carried out by it, the appellants were rightly eligible for the transfer of those credits - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Entitlement to CENVAT Credit for inputs purchased by job-worker but not received by the appellant.

Analysis:
The appellant, M/s Ballarpur Industries Ltd., now known as BILT Graphite Paper Product Ltd., appealed against the denial of CENVAT Credit for inputs purchased by a job-worker but not received in their factory. The issue revolved around whether the appellant is entitled to claim credit for inputs used by the job-worker in manufacturing the appellant's products. The Tribunal referred to previous decisions, including Flex Industries Ltd. Vs. Commissioner of Central Excise and Mahadev Industries Vs. Commissioner of Central Excise, to establish ownership of the inputs with the appellant, even if utilized at the job-worker's premises. The Tribunal noted that the processed goods were cleared by the appellant, indicating the inputs were used for their own product. Citing various judgments, the Tribunal held that the credit of duty paid inputs used by the job-worker is available to the principal supplier, i.e., the appellant. The Tribunal differentiated cases where duty was discharged on a loan license basis, emphasizing the unique circumstances of each case.

In the specific case at hand, the Tribunal concluded that the CENVAT credit for inputs sold by the job-worker to the appellant and used in the manufacturing process of the appellant's goods is admissible. As the demand was deemed unsustainable, no penalty was applicable, rendering the Revenue's appeal non-maintainable. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief due to the appellant. The judgment highlighted the ownership and utilization of inputs in job-work scenarios, emphasizing the admissibility of CENVAT credit in such circumstances based on established legal precedents and the specific facts of the case.