TaxTMI Login
AI Drafter - (New and Powerful) ✕
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
Just a moment...
AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: Whether Cenvat credit on inputs and capital goods used in job-work operations covered by Notification No. 214/86-CE could be denied on the ground that the job-work activity involved exempted goods and, therefore, attracted the bar under Rule 57C of the Central Excise Rules and Rule 6(1) and Rule 6(4) of the Cenvat Credit Rules, 2004.
Analysis: The decisive consideration was that goods processed on job work under Notification No. 214/86-CE are not exempted in the true sense, because the duty liability is shifted to the principal manufacturer and is discharged at the stage of the final product. The prior larger bench view, as affirmed by the Supreme Court, held that credit is not denied merely because an intermediate or job-work product moves without payment of duty when the final product emerges on duty payment by the principal manufacturer. On that reasoning, the provisions invoked to deny credit on exempted goods had no application to the inputs and capital goods used for such job work.
Conclusion: Cenvat credit was admissible and the demand for reversal could not be sustained; the assessee succeeded on the substantive issue.
Final Conclusion: The appeals of the assessee were allowed and the Revenue appeal was rejected, leaving the credit availed for job-work operations undisturbed.
Ratio Decidendi: Where job-work clearances are covered by Notification No. 214/86-CE and the duty burden ultimately rests on the principal manufacturer, the goods are not treated as exempted goods for the purpose of denying credit on inputs or capital goods used in that process.
TaxTMI 
