Cenvat credit for job work goods cleared to the principal manufacturer was upheld, with Rule 6(2) found inapplicable.

Cenvat credit on inputs used by a job worker in manufacture of goods cleared to the principal manufacturer was held admissible. Applying its Larger Bench precedent, the Tribunal treated such goods as not being exempted goods, so the restrictions on common inputs and the obligation to maintain separate accounts under Rule 6(2) did not apply. The denial of credit by the lower authority was therefore unsustainable and was rejected.

---

---

Issues: Whether Cenvat credit on inputs used by a job worker in the manufacture of goods cleared to the principal manufacturer could be denied on the ground that separate accounts were not maintained under Rule 6(2) of the Cenvat Credit Rules.

Analysis: The Tribunal applied its Larger Bench precedent and held that goods manufactured on job work basis and cleared to the principal manufacturer are not to be treated as exempted goods. On that basis, the restrictions relating to common inputs and maintenance of separate accounts under Rule 6(2) had no application. The denial of credit by the lower authority was therefore found unsustainable.

Conclusion: Cenvat credit was held admissible to the job worker, and the denial based on Rule 6(2) was rejected.

---