CENVAT credit on dies sent directly to a job worker cannot be denied for non-receipt in factory or 180-day return limits.

CENVAT credit on cylinders used as dies could not be denied merely because the goods were directly sent by the supplier to a job worker and were not physically brought into the assessee's factory. The 180-day return condition was held inapplicable to jigs, fixtures, moulds and dies, and the claim that physical removal from the factory was mandatory was not supported. The cylinders were used by the job worker to print labels for the assessee, duty had been paid on the cylinders, and processing charges were also paid, which supported allowance of credit.

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Issues: Whether CENVAT credit on capital goods in the nature of cylinders used as dies, directly dispatched by the supplier to the job worker at the instance of the assessee, could be denied on the ground that the goods were not physically brought into the assessee's factory and were not returned within 180 days.

Analysis: The condition requiring return of capital goods within 180 days was held inapplicable to jigs, fixtures, moulds and dies. The finding was supported by the relevant paragraph of the CBEC Central Excise Manual. The assertion that physical removal from the assessee's factory to the job worker's premises was mandatory was not substantiated. The cylinders were used by the job worker for printing labels for the assessee, duty was paid on the cylinders, and the assessee had also paid processing charges. These findings justified allowance of credit.

Conclusion: CENVAT credit could not be denied to the assessee on the stated grounds, and the Revenue's challenge failed.

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