CENVAT credit on job-work manufacturing services upheld under exemption notification, with Revenue challenge rejected on binding precedent.

CENVAT credit on services used for manufacturing goods cleared on job work basis under Notification No. 214/86-CE was held admissible. The Tribunal noted that the issue was already settled by binding precedent, including the Bombay High Court's decision in Sterlite Industries and the Supreme Court's principle in Escorts Limited, so the Commissioner (Appeals)'s order allowing credit was sustained. The Revenue's appeal was therefore dismissed.

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Issues: Whether CENVAT credit on services used in the manufacture of goods cleared on job work basis under Notification No. 214/86-CE was admissible, and whether the Revenue's appeal against the order allowing such credit deserved interference.

Analysis: The dispute turned on the admissibility of CENVAT credit in respect of services used for manufacturing goods on job work basis, where the clearances were made under the exemption notification. The Tribunal noted that the issue had already been settled by the Bombay High Court in Sterlite Industries, where the Department's challenge to the Tribunal's view had been rejected and the principle laid down by the Supreme Court in Escorts Limited had been followed. In view of that binding position, the Commissioner (Appeals)'s order allowing the credit call was sustained.

Conclusion: CENVAT credit was held admissible, and the Revenue's appeal was dismissed.

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