2018 (12) TMI 1527 - AT - Central Excise

CENVAT Credit - service tax paid by job-worker - reverse charge mechanism - reopening of assessment at the end of service recipient - Held that - It is not disputed that the job worker has paid the service tax. The credit of tax paid is available to the recipient and the law does not talk about the tax payable. As such, the job worker having paid the tax, whether payable or not, the appellant was entitled to the credit. The assessment cannot be reopened at the recipient end as held by number of decisions of the Tribunal - reliance placed in the case of Ultratech Cement Ltd. 2010 (12) TMI 90 - CESTAT, MUMBAI . Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Denial of cenvat credit to the appellant for service tax paid by job worker
- Applicability of exemption notification to job worker
- Entitlement of appellant to credit for tax "paid"
- Reopening of assessment at recipient end

Analysis:
The judgment addresses the issue of denial of cenvat credit to the appellant for the service tax paid by the job worker. The Revenue had denied the credit on the grounds that the job worker should not have paid the service tax due to entitlement to an exemption notification. However, it was established that the job worker did pay the service tax, and the law allows the recipient to claim credit for tax "paid," irrespective of whether it was payable or not. Therefore, the appellant was rightfully entitled to the credit.

Furthermore, the judgment delves into the aspect of reopening assessments at the recipient end. It references several decisions of the Tribunal, such as DIL Ltd., Trinetra Texturisers P. Ltd., Multi Organics P. Ltd., Ultratech Cement Ltd., and Laxmi Metal Pressing Works P. Ltd., which collectively establish that assessments cannot be reopened at the recipient end. This legal principle reinforces the appellant's right to claim the cenvat credit for the tax paid by the job worker.

In conclusion, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant, providing consequential relief. The judgment solidifies the appellant's entitlement to the cenvat credit for the service tax paid by the job worker and affirms the legal position that assessments cannot be reopened at the recipient end based on the cited precedents.