Cenvat credit on job worker input services is admissible when used exclusively for manufacturing the principal manufacturer's final products.

Cenvat credit was admissible on input services used at a job worker's premises where the job work was undertaken exclusively for the manufacturer under the Cenvat Credit Rules, 2004. Because the services were used in relation to the manufacture of the manufacturer's final products, including intermediate goods manufactured by the job worker, Rule 3 permitted credit. The disallowance was therefore unsustainable, and the assessee's entitlement to credit was upheld.

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Issues: Whether Cenvat credit on input services used at the job worker's premises was admissible to the appellant when the job work was undertaken exclusively on behalf of the appellant under the Cenvat Credit Rules, 2004.

Analysis: The inputs were sent to the appellant's own job worker unit under Rule 4(5)(a) of the Cenvat Credit Rules, 2004, and the job worker was engaged exclusively in manufacturing goods for the appellant. The services used at the job work premises were therefore connected with and used in relation to the manufacture of the appellant's final products. Rule 3 of the Cenvat Credit Rules, 2004 expressly permits credit in respect of input services received for such manufacture, including intermediate products manufactured by a job worker availing the benefit of Notification No. 214/86-C.E. dated 25.03.1986.

Conclusion: Cenvat credit on the input services used by the job worker was admissible and the disallowance was unsustainable.

Final Conclusion: The assessee's entitlement to Cenvat credit was upheld and the impugned orders were set aside.

Ratio Decidendi: Where job work is undertaken exclusively on behalf of the manufacturer under the Cenvat Credit Rules, input services used at the job work premises are eligible for credit if they are used in relation to the manufacture of the manufacturer's final products.

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