Modvat/Cenvat credit cannot be denied where goods are manufactured through job workers and duty is duly paid.

Modvat/Cenvat credit could not be denied merely because manufacture was carried out through job workers from premises other than the assessee's own factory and without plant and machinery at its registered premises. The term "manufacturer" under Section 2(f) of the Central Excise Act, 1944 is wide enough to include a person who gets goods manufactured on his own account through hired labour or otherwise. As the assessee held excise registration, had departmental permission to operate from the job worker's premises, and used the credit for duty payment without any shown revenue loss, the denial of credit was unsustainable and was set aside.

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Issues: Whether the appellant could be denied Modvat/Cenvat credit merely because the manufacture was carried out through job workers from premises other than its own factory and without plant and machinery at its registered premises.

Analysis: The appellant held central excise registration for manufacture of footwear and had departmental permission to operate from the job worker's and to remove finished goods from that premises under the relevant rule. The expression "manufacturer" under Section 2(f) of the Central Excise Act, 1944 is wide enough to include a person who gets goods manufactured on his own account through hired labour or otherwise. In these circumstances, the absence of plant and machinery at the appellant's own premises did not justify treating it as a non-manufacturer. Since the credit had been used for payment of duty on clearances and no revenue loss was shown, the denial of credit was unsustainable.

Conclusion: The denial of Modvat/Cenvat credit was set aside and the appeal was allowed in favour of the assessee.

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