2010 (3) TMI 513 - AT - Central Excise

Time Barred- Penalty- the common impugned order, the ld. Commissioner (Appeals) held against the assessee on merits and accordingly denied to them CENVAT credit of service tax paid by their job worker. In the light of the decision of Supreme Court s decision in Commissioner of Central Excise & Customs vs. MDS Switchgear Ltd. 2008 -TMI - 30952 - SUPREME COURT, held that- , the assessee s appeal for CENVAT credit of the service tax paid by their job worker on the service rendered by the latter requires to be allowed. It is ordered accordingly. Consequently, the Revenue s appeal gets dismissed.

Summary

Issues:
1. Availment of Cenvat credit of service tax paid by job worker.
2. Time-barred demand and penalty imposition under Section 11AC.

Analysis:
1. The judgment involves two appeals, one by the assessee and the other by the Revenue. The ld. Commissioner (Appeals) denied Cenvat credit of service tax paid by the job worker to the assessee. The assessee challenged this part of the order, while the Revenue challenged the time-barred demand and penalty imposition under Section 11AC.

2. The Tribunal analyzed whether the assessee was entitled to avail Cenvat credit of service tax paid by the job worker. The ld. counsel relied on precedents like Commissioner of Central Excise v. DIL Ltd., SPIC (HCD) Ltd. v. Commissioner of Central Excise, and Commissioner of Central Excise & Customs v. MDS Switchgear Ltd. The Revenue relied on Bombay Dyeing & Manufacturing Co. Ltd. v. CCE, Mumbai. The Tribunal noted that in a similar case, DIL Ltd., it was held that the principal manufacturer could avail credit of service tax paid by the job worker, rejecting the Revenue's contention based on exemption Notification. The Tribunal also considered the decision in SPIC (HCD) Ltd. and emphasized the principle of following the later contradictory decision, which favored the assessee. Additionally, the Tribunal referenced the Supreme Court decision in Commissioner of Central Excise & Customs v. MDS Switchgear Ltd., which supported allowing credit of duty paid on inputs.

3. Ultimately, the Tribunal ruled in favor of the assessee, allowing them to avail Cenvat credit of the service tax paid by their job worker. The Revenue's appeal was dismissed as a result of this decision. The judgment emphasized the importance of judicial discipline in following precedents and highlighted the revenue-neutral aspect considered by the Supreme Court in a related case.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Tribunal's decision on each matter.