CENVAT credit on capital goods upheld where manufacturing and job work coexisted with dutiable clearances.

CENVAT credit on capital goods was held admissible where the unit used the goods in manufacture, undertook job work under Notification No. 214/1986-CE, and also cleared other consignments on payment of duty. The presence of both dutiable clearances and job work activity did not justify denial of credit on the facts noted, and an earlier decision in the respondent's own case had already supported the same view. The Revenue's challenge to the order allowing credit therefore failed.

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Issues: Whether CENVAT credit on capital goods was admissible when the unit also undertook job work under Notification No. 214/1986-CE and cleared other consignments on payment of duty.

Analysis: The capital goods were used in the manufacture carried on by the unit, and the record showed that the respondent also cleared dutiable goods during the relevant period. The Commissioner (Appeals) had found that the presence of both dutiable and exempted activities did not justify denial of credit in the facts of the case. The Tribunal also noted that an identical issue in the respondent's own case for an earlier period had already been decided in favour of the respondent.

Conclusion: CENVAT credit could not be denied, and the Revenue's challenge to the order allowing credit failed.

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