2007 (11) TMI 252 - AT - Central Excise

Assessee procured duty paid inputs & availed credit on them & used for the manufacture of goods on job work basis - Revenue contended that such credit is inadmissible, as an item cleared under job work basis are without payment of duty - held that clearance under the job work basis cannot be equated to as clearance without payment of duty, as these job worked goods were further utilized in the manufacture of dutiable final product - appeal filed by the Revenue is rejected credit allowed

Summary

Issues:
1. Adjournment sought multiple times by respondent.
2. Admissibility of Cenvat credit on duty paid inputs used for job work goods.
3. Interpretation of Rule 57C in relation to Modvat credit reversal.
4. Application of decision in Sterlite Industries (I) Ltd. case to the current scenario.

Analysis:
1. The respondent sought adjournment multiple times, which was accommodated, but was absent during the appeal hearing. The request for adjournment was declined, and the appeal was taken up for disposal.

2. The issue revolved around the admissibility of Cenvat credit on duty paid inputs used for manufacturing goods on a job work basis. The Revenue contended that such credit is inadmissible as items cleared under job work basis are without payment of duty. However, the Tribunal found that the issue was covered in favor of the respondent by the decision of the Larger Bench in the Sterlite Industries (I) Ltd. case.

3. The Tribunal considered the interpretation of Rule 57C in relation to Modvat credit reversal. The Revenue argued that the case law relied upon by them was not applicable as the issue in this case was regarding the reversal of Modvat credit availed on inputs used for manufacturing job work goods. The Tribunal noted that the decision in the Sterlite Industries (I) Ltd. case held that clearance under job work basis cannot be equated to clearance without payment of duty.

4. The Tribunal concluded that the issue was squarely covered in favor of the respondent by the decision of the Larger Bench in the Sterlite Industries (I) Ltd. case. Therefore, the appeal filed by the Revenue was rejected based on the interpretation of the law and the specific circumstances of the case.