Cenvat credit on job-worked goods remained admissible where the transaction was bona fide and no evasion was shown.

Cenvat credit was treated as admissible where goods were sent for job work under Notification No. 214/86-CE, because the supplier remained responsible for duty on the finished products and the transaction showed no evasion, suppression, or fraud. The Tribunal also relied on a Board circular stating that reversal or recovery of credit from the consignee need not be pursued when the transaction is bona fide. It applied the further principle that an issue at the supplier's end should not, by itself, disturb assessment at the input receiver's end. On that basis, denial of credit was unsustainable.

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Issues: Whether Cenvat credit was admissible to the supplier on duty paid by the job worker on goods sent for job work under Notification No. 214/86-CE.

Analysis: The goods were sent for job work under Notification No. 214/86-CE, under which the supplier remained responsible for the duty liability on the finished products. The job worker had in fact paid duty on the job work charges, and the transaction was not shown to involve evasion, suppression, or fraud. The Tribunal also relied on the Board circular clarifying that reversal or recovery of credit from the consignee need not be pursued where the bona fide nature of the transaction is not in dispute. It further applied the principle that assessment at the input supplier end should not be disturbed at the input receiver end merely because of a dispute at the supplier's end.

Conclusion: Cenvat credit was admissible and the denial of credit was unsustainable.

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