Appellant entitled to CENVAT credit for input services at job worker premises

The appellant was granted entitlement to CENVAT credit for input services provided at job worker premises. The court determined that even though the services were rendered at the job worker premises, as the expenses were borne by the appellant and the job worker exclusively manufactured intermediate goods for the appellant, the services were deemed related to the manufacture of the final product, thus qualifying for CENVAT credit. The appellant's argument was supported by relevant judgments, leading to the allowance of the appeal on 22.12.2017.

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Issues Involved:
- Entitlement to CENVAT credit for input services provided at job worker premises.

Analysis:

Issue 1: Entitlement to CENVAT credit for input services provided at job worker premises

The appellant argued that as per Rule 2(l) of CENVAT Credit Rules, 2004, the services provided at the job worker premises, in relation to the manufacturing of intermediate goods, should be eligible for CENVAT credit. The appellant contended that the definition of "input service" does not restrict the availment of credit based on the location of service receipt. The appellant supported their argument by citing judgments such as MRF Ltd. vs. Commissioner of Central Excise & Service Tax (LTU), Chennai and Commissioner of Central Excise, Delhi-III vs. Interface Microsystems. Additionally, the appellant claimed that the demand made for the period beyond the normal duration was time-barred, as they had maintained all necessary records and the credit availed was reflected in their monthly returns. Several judgments were cited in support, including Agarwal Brothers, Marmago Steel, and Pushpam Pharmaceuticals Co. vs. Collector of Central Excise, Bombay.

On the other hand, the Revenue representative contended that since the service was not directly received by the appellant, they should not be entitled to the credit. The Revenue relied on judgments like Zenith Machine Tools Pvt. Ltd. vs. Commissioner of Central Excise, Belgaum and Lao More Biscuits Pvt. Ltd. vs. Commissioner of Central Excise & Service Tax, Ahmedabad to support their argument.

In the final judgment, it was observed that even though the service was provided at the job worker premises, the expenses were borne by the appellant, and the job worker carried out the manufacturing of intermediate goods exclusively for the appellant. Therefore, the service, though received at the job worker place, was deemed to be in relation to the manufacture of the final product of the appellant, making it eligible for CENVAT credit. The judgment relied upon by the appellant was considered applicable, while those cited by the Revenue were distinguished as being based on different facts. Consequently, the appeal was allowed, and the decision was pronounced in court on 22.12.2017.

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