Modvat credit on duty actually paid by a job worker upheld despite exemption notification and Rule 57F(4) challenge.

Modvat credit was held admissible where goods were sent for job work and the job worker, though exempt under the notification, had actually paid duty on the goods. The Court noted that the same issue had already been decided against the revenue and saw no reason to depart from that view. Rule 57F(4) did not bar credit in these facts, so the assessee was entitled to credit of the duty actually paid and the revenue's challenge failed.

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Issues: Whether Modvat credit could be denied when duty had been paid by a job worker despite exemption under the relevant notification, and whether Rule 57F(4) prevented such credit.

Analysis: The goods were sent for job work and, under the notification, the job worker was exempt from duty. Nevertheless, duty was paid and the assessee took Modvat credit of the amount actually paid. The Court noted that the same question had already been decided against the revenue in an earlier appeal and found no reason to take a different view.

Conclusion: Modvat credit was admissible to the assessee on the duty actually paid by the job worker, and the revenue's challenge failed.

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