Appeal granted for input credit; Job worker tools case remanded for fresh decision

The Tribunal allowed the appeal, granting credit for inputs used for testing in the manufacturing process based on precedent decisions. Regarding tools manufactured by a job worker, the Tribunal remanded the matter for a fresh decision, allowing the appellants an opportunity to provide evidence that the tools have been returned.

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Issues involved:
1. Denial of credit for inputs used for testing in manufacturing process.
2. Denial of credit for tools manufactured by job worker and retained by job worker for production of intermediates.

Issue 1 - Inputs used for testing:
The Department denied credit for inputs used for testing, arguing it is not part of the manufacturing process. However, the Tribunal referred to precedent decisions where credit was allowed for similar cases. The Tribunal held that the appellants are eligible for credit for inputs used for testing as it is in relation to manufacturing.

Issue 2 - Tools manufactured by job worker:
The Department denied credit for tools manufactured by the job worker and retained by them, as the tools did not come back to the appellants. The consultant for the appellants stated that all the tools have since been returned and can provide evidence if needed. The Tribunal modified the order, allowing credit for inputs used for testing and remanding the matter regarding tools back to the original authority for a fresh decision. The appellants are to be given a reasonable opportunity to present evidence that the tools have been returned.

The appeal was allowed with the above terms.

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