Cenvat credit on job-work inputs remained admissible, as duty-paid final products could not be denied input credit.

Cenvat credit was held admissible on inputs used in goods manufactured on a job-work basis and cleared without payment of duty under Notification No. 214/86-CE, because the credit position remained consistent with the rule that duty-paid final products should not be denied input credit merely due to the manufacturing chain. The High Court followed its earlier decision and Supreme Court authorities, including Commissioner of C. Ex. v. Gujarat Narmada Fertilizers Co. Ltd., and rejected the Revenue's challenge to the Tribunal's grant of credit.

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Issues: Whether Cenvat credit was admissible on inputs used in goods manufactured on job work basis and cleared without payment of duty under Notification No. 214/86-CE dated 25.03.1986, and whether the Tribunal was in granting such credit.

Analysis: The allowance of credit was held to be consistent with the view that where duty is paid on the final product, Cenvat credit cannot be denied on inputs used in the manufacture of inputs. The Court followed its earlier decision and the decisions of the Supreme Court in similar matters, and also noted the support from the Supreme Court in Commissioner of C. Ex. v. Gujarat Narmada Fertilizers Co. Ltd.

Conclusion: Cenvat credit was held to be admissible and the Revenue's challenge failed.

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