CENVAT credit in job work does not create double benefit when taken only on duty actually paid at each stage.

Credit taken only on duty actually paid at each stage did not amount to impermissible double benefit in a job-work arrangement under Notification No. 214/86 dated 25-3-1986. The assessee had availed credit on the duty paid on plastic components cleared to the job worker and again on the duty paid on the painted goods returned under invoice. Because the job worker could either pay duty or clear the processed goods without duty under the notification, the mere movement of goods through job work did not create double credit where each credit matched actual duty paid. The demand and penalty were therefore treated as unsustainable.

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Issues: Whether credit taken on the original inputs and again on the processed goods returned by the job worker amounted to impermissible double benefit under Notification No. 214/86 dated 25-3-1986.

Analysis: The appellants had taken credit only of the duty paid on the plastic components cleared to the job worker and of the duty paid by the job worker on the painted goods returned under invoices. The job worker could either pay duty or clear the processed goods without payment of duty under the notification. Since credit was confined to duty actually paid at each stage, there was no double benefit.

Conclusion: The demand and penalty were unsustainable and the appeal was allowed in favour of the assessee.

Ratio Decidendi: Where duty credit is taken only on duty actually paid on inputs and again on duty-paid processed goods, it does not constitute double credit or double benefit merely because the goods passed through job work under Notification No. 214/86 dated 25-3-1986.

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