Cenvat credit on job-worked inputs allowed where duty was paid by the job worker before return of the processed goods.

Cenvat credit was allowable where inputs were sent to a job worker under the prescribed challan, duty was paid by the job worker on the processed goods before return, and binding precedent treated that payment as sufficient basis for credit to the manufacturer receiving them back. On that footing, denial of credit was unsustainable and the manufacturer was entitled to avail the credit.

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Issues: Whether the appellant was entitled to Cenvat credit of duty paid by the job worker on inputs cleared for processing under Rule 4(5)(a) and received back after processing.

Analysis: The goods were sent to the job worker under the prescribed challan and duty was discharged by the job worker before the processed inputs were returned to the appellant. The issue stood covered by binding precedent holding that once duty has been paid by the job worker on such goods, there is no basis to deny Cenvat credit to the manufacturer receiving the goods back.

Conclusion: The appellant was entitled to avail the Cenvat credit, and the denial of credit was unsustainable.

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