Cenvat credit on job-work inputs remains admissible when duty payment by the principal is not factually disputed.

Cenvat credit on inputs used for job-work goods cleared to the principal under Notification No. 214/86-CE was admissible because the dispute was already covered by prior precedent, including the Larger Bench ruling in Sterlite Industries, and no contrary factual basis was established. The Revenue's reliance on cases involving materially different facts, including situations where duty payment by the principal was not shown, was held inapplicable. As there was no allegation in the show cause notice or impugned order that the principal had failed to pay duty, the credit denial could not be sustained and the order was set aside in favour of the assessee.

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Issues: Whether Cenvat credit on inputs used in job-work goods returned to the principal without payment of duty under Notification No. 214/86-CE dated 25-3-1986 was admissible.

Analysis: The dispute was covered by earlier decisions, including the Larger Bench ruling in Sterlite Industries, and was treated as no longer res integra. The Revenue authorities relied on decisions where duty payment by the principal on the job-work goods was not established or where the factual matrix was materially different. In the present case, there was no allegation in the show cause notice or the impugned order that duty payment by the principal was not made, and the Revenue's reliance on cases involving different facts was held to be inapplicable. The goods being processed under Notification No. 214/86-CE did not, on these facts, deny credit on the inputs used in the job work.

Conclusion: Cenvat credit was held admissible and the impugned order was set aside in favour of the assessee.

Ratio Decidendi: Where job-work goods are cleared under Notification No. 214/86-CE and the Revenue fails to establish a factual basis for denying credit, Cenvat credit on inputs used in such job work is admissible.

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