Job-work under Notification No. 8/2005-S.T. not treated as exempted service for Rule 6(2) pre-deposit purposes.

Job-work clearances covered by Notification No. 8/2005-S.T. were treated, on a prima facie basis, as outside the scope of exempted services for invoking Rule 6(2) of the Cenvat Credit Rules. The Tribunal relied on a Larger Bench ruling concerning a pari materia job-work notification and noted that the same principle had been followed in later decisions, while the adjudicating authority had overlooked it. On that footing, the appellant was granted unconditional stay of the demand and penalty pre-deposit.

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Issues: Whether the processes undertaken on goods sent for job work under Notification No. 8/2005-S.T. could be treated as exempted services so as to attract Rule 6(2) of the Cenvat Credit Rules, and whether the appellant was entitled to unconditional stay of pre-deposit.

Analysis: The Tribunal noted that the job-work arrangement was covered by Notification No. 8/2005-S.T. and that the appellant relied on the Larger Bench ruling dealing with a pari materia notification governing manufacture on job-work basis. On a prima facie view, the Tribunal accepted that such clearances could not be treated as exempted clearances for the purpose of invoking Rule 6(2). It also recorded that the earlier Larger Bench decision had been followed in several later decisions and had been overlooked by the adjudicating authority.

Conclusion: The appellant was held entitled to unconditional stay of the demand and penalty pre-deposit.

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