Tribunal grants cenvat credit for detergent inputs; Direct job worker processing upheld

The Tribunal allowed the appeal, overturning the denial of cenvat credit on inputs for manufacturing detergent products. The appellant's practice of sending goods directly to a job worker for processing, as supported by precedents, was deemed compliant with Rule 4(5)(a) of the CCR, 2004. The Tribunal emphasized that receiving processed goods back sufficed for credit eligibility, rejecting the Revenue's argument based on the goods not reaching the appellant's factory. The appellant was granted the cenvat credit, with the previous denial annulled, and the appeal was successful with consequential relief.

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Issues:
Appeal against denial of cenvat credit on inputs.

Analysis:
The appellant, engaged in manufacturing detergent products, availed cenvat credit on inputs during the disputed period. The appellant procured inputs from the market and sent them directly to a job worker, with invoices showing consignment to the job worker's premises on the appellant's account. The job worker processed the goods and returned them to the appellant for manufacturing final products. However, the Revenue contended that since the goods were not received at the appellant's factory, cenvat credit was denied, leading to duty demand, interest, and penalties. The appellant argued that they followed the procedure under Rule 4(5)(a) of the CCR, 2004, and cited precedents to support their claim.

The Tribunal noted that the goods were sent to the job worker on the appellant's instruction and received back after processing, which was undisputed. Relying on previous decisions, the Tribunal held that as long as the goods were received after processing on job work, cenvat credit could not be denied. The Tribunal referred to a case involving Bharat Heavy Electricals Limited and another involving Procter & Gamble to support its decision. The Tribunal emphasized that the direct transport of goods to the job worker's premises did not warrant denial of credit, especially when the job worker processed the materials as per regulations.

In light of the precedents and the undisputed receipt of job work goods by the appellant, the Tribunal concluded that the appellant was entitled to cenvat credit. Consequently, the impugned order denying the credit was set aside, and the appeal was allowed with consequential relief.

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