Job worker entitled to duty credit on inputs used in manufacturing goods on job work basis

The Tribunal allowed the appellant's appeal against the Commissioner of Central Excise (Appeals) decision, based on the precedent set by the Larger Bench's ruling in the Sterlite Industries Ltd. case. The Tribunal held that a job worker receiving goods from a manufacturer is entitled to take credit of duty on inputs used in manufacturing goods on a job work basis. Consequently, the impugned order was set aside, granting relief to the appellant in accordance with the law.

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Issues:
- Appeal against Order-in-Appeal No. SK/RGD/2013-14 dated 29.8.2013 passed by the Commissioner of Central Excise (Appeals), Mumbai-II.
- Availing CENVAT Credit on raw materials but clearing job work goods without payment of duty.
- Show-cause notice proposing demand of duty, interest, and penalty.
- Appeal rejection by the Commissioner (Appeals).
- Interpretation of duty liability on job work goods.
- Application of Rule 4(5)(a) of Cenvat Credit Rules.
- Precedents set by Larger Bench's decision in Sterlite Industries Ltd. case.
- Arguments for and against the duty liability on job work goods.

Analysis:
The appeal was filed against Order-in-Appeal No. SK/RGD/2013-14 dated 29.8.2013 passed by the Commissioner of Central Excise (Appeals), Mumbai-II. The case involved M/s Maharashtra Aldehydes Chemical Ltd., engaged in manufacturing "Thione" on a job-work basis and clearing the same to the principal manufacturer under Notification No. 214/86. The appellant availed CENVAT Credit on raw materials but cleared job work goods without duty payment, leading to a show-cause notice proposing a duty demand of &8377; 49,47,028/- along with interest and penalty. The Commissioner (Appeals) rejected the appellant's appeal, prompting the appellant to challenge the decision.

The appellant argued that the duty liability on job work goods should not be considered as exempted goods since the principal manufacturer undertook the responsibility of paying excise duty on the intermediate goods. The appellant relied on the Larger Bench's decision in the Sterlite Industries Ltd. case, emphasizing that the duty liability of job work goods falls on the raw material supplier, not the appellant. Additionally, the appellant cited the judgment of the Hon'ble Bombay High Court in Tata Motors Ltd. vs. Union of India to support their case.

On the other hand, the Revenue representative supported the findings of the lower authorities and urged the upholding of the impugned order. However, the Tribunal, after considering the arguments, referred to the Larger Bench's decision in the Sterlite Industries Ltd. case, which established that a job worker receiving goods from a manufacturer is entitled to take credit of duty on inputs used in manufacturing goods on a job work basis. Following this precedent, the Tribunal set aside the impugned order, allowing the appeal of the appellant with any consequential benefits as per the law.

In conclusion, the Tribunal's decision was based on the established precedent set by the Larger Bench's ruling in the Sterlite Industries Ltd. case, which clarified the duty liability on job work goods and upheld the appellant's appeal against the Order-in-Appeal.

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