2017 (5) TMI 459 - AT - Central Excise

CENVAT credit - capital goods - job-work - whether cenvat credit was correctly availed by the appellants on capital goods used exclusively for manufacturing goods as a job worker for their principal manufacturer? - Held that - the issue involved has been decided in favor of the assessee in the case of S.M. Machines Pvt. Ltd. Versus C.C.E., Delhi 2017 (1) TMI 536 - CESTAT CHANDIGARH , where it was held that availment of MODVAT Credit on capital goods to be job work is in order - credit allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
Appeal against order allowing CENVAT credit on capital goods used for job work.

Analysis:
The appeal was filed by the Revenue challenging the order passed by the Commissioner (A) in favor of the assessee, allowing CENVAT credit on capital goods used for job work. The Revenue contended that the impugned order was not sustainable in law, citing a precedent regarding the admissibility of MODVAT credit at the time of receipt of capital goods. The assessee, on the other hand, relied on a series of judgments by different Tribunal Benches supporting their case. The Tribunal considered the submissions of both parties and the cited decisions. It was observed that the issue was decisively settled in favor of the assessee by the judgments referred to. By following the precedents and the ratios established in those cases, the Tribunal concluded that there was no merit in the Revenue's appeal and dismissed the same.

This case involved a dispute over the admissibility of CENVAT credit on capital goods used exclusively for job work. The Revenue argued that the credit availed on such goods was irregular, leading to the issuance of a show-cause notice disallowing the credit along with interest and imposing a penalty. However, the Commissioner (A) allowed the appeal of the assessee, setting aside the Order-in-Original. The Tribunal, after hearing both parties and examining the records, found that the issue had been consistently decided in favor of the assessee by various Tribunal Benches, as evidenced by the judgments cited during the proceedings.

The Revenue's contention was based on the requirement to assess the availability of MODVAT credit at the time of receipt of capital goods, particularly if they were used exclusively for manufacturing exempted goods. In contrast, the assessee relied on the decisions of different Tribunal Benches, which supported their position regarding the admissibility of CENVAT credit on capital goods used for job work. The Tribunal, after thorough consideration of the arguments and precedents, concurred with the assessee's position and held that the issue was squarely covered in their favor by the cited judgments. Consequently, the Tribunal dismissed the Revenue's appeal, upholding the decision of the Commissioner (A) in allowing the CENVAT credit on capital goods utilized for job work.

In conclusion, the Tribunal's detailed analysis and reliance on established legal precedents resulted in the dismissal of the Revenue's appeal against the order permitting CENVAT credit on capital goods used for job work. The decision underscored the importance of consistent judicial interpretation and application of tax laws in resolving disputes related to credit availment and utilization, providing clarity and guidance for future cases involving similar issues.