Tribunal allows appeal, grants CENVAT credit for duty paid on inputs by job worker supplying goods.

The Tribunal allowed the appeal, setting aside the impugned order that denied CENVAT credit to the appellant based on duty paid by a job worker supplying goods. It was established that the inputs were covered by valid documents for credit, and the duty paid by the job worker was not refunded to the respondent. Citing relevant precedents, the Tribunal held that duty paid on inputs used in manufacturing the final product must be allowed as credit, and questions on dutiability or assessable value cannot be raised at the end of the manufacturer. The appellant's appeals were therefore allowed.

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Issues:
Denial of CENVAT credit on duty paid by job worker supplying goods to appellant.

The appellant's grievance was that CENVAT credit of duty paid on input was denied as the job worker who supplied the goods to the appellant had paid the duty. The Tribunal noted that the job worker did pay duty on the goods supplied, which were further processed by the appellant to manufacture their final product. It was established that the inputs were covered by a valid document for availing CENVAT credit. The benefit could not be denied to the appellant on the basis that the job worker should not have paid duty on the goods. The respondent did not claim that the duty paid by the job worker was refunded to them. The Tribunal referred to the decision in Kwality Biscuits Limited v. Commissioner, where it was held that MODVAT credit of duty paid on input packing charges should not be denied to the assessee. The appellant also cited other relevant decisions such as Indian Oil Corporation Limited v. Commissioner, Commissioner v. MDS Switchgear Ltd., and Commissioner v. Hylite Cables, which emphasized that any duty actually paid on input used in the manufacture of the final product must be allowed as MODVAT/CENVAT credit. The Tribunal concluded that questions regarding the dutiability of input or the inclusion of any element of cost in the assessable value of the input cannot be raised at the end of the manufacturer of the final product. Consequently, the impugned order was set aside, and the appeals were allowed.

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