Cenvat credit on self-issued invoice upheld where duty was paid and yarn returned after job work processing.

Cenvat credit was available on duty-paid yarn sent to job workers for mercerization and returned for further processing where the duty had in fact been paid by the assessee and the goods were used in manufacture of final products. The dispute concerned only the duty-paying document, and the assessee's own invoice was accepted as a valid Cenvatable document because it would also have served in a comparable sale transaction. Credit could not be denied merely because the invoice was self-issued on these facts.

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Issues: Whether the assessee was entitled to Cenvat credit on the duty-paid yarn cleared by it to job workers for mercerization and taken back for further processing, on the strength of its own invoice as the duty-paying document.

Analysis: The duty on the yarn cleared to the job worker had in fact been paid by the assessee and the goods were received back after processing for use in the manufacture of final products. The dispute was confined to the document on which credit was taken. Since the same invoice would have served as a valid duty-paying document in a comparable sale situation, there was no basis to deny credit merely because the invoice had been issued by the assessee itself. On these facts, the invoice was treated as a valid Cenvatable document for the relevant period.

Conclusion: The assessee was entitled to avail Cenvat credit on the strength of its own invoice, and the Revenue's appeal failed.

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