Job worker treated as manufacturer, making Modvat credit on furnace oil admissible for inputs used in manufacture.

A job worker was treated as a manufacturer for Modvat purposes and was therefore entitled to credit on furnace oil used in the manufacture of finished products. The denial of credit was based on the contention that a job worker was not a manufacturer, but the Tribunal rejected that premise and held that job work manufacture falls within the scope of manufacturing activity for Modvat credit. On that basis, the credit was admissible and the assessee's claim was allowed.

---

---

Issues: Whether a job worker is a manufacturer entitled to Modvat credit on furnace oil used in the manufacture of finished products.

Analysis: The dispute concerned denial of Modvat credit on furnace oil used as input in job-work manufacture. The Tribunal held that a job worker is also a manufacturer and, on that basis, is entitled to avail Modvat credit on inputs used in manufacture of final products. Since the denial rested on the premise that the assessee was not a manufacturer, there was no justification to refuse the credit.

Conclusion: The issue was decided in favour of the assessee, and Modvat credit on furnace oil was held admissible.

---