Cenvat credit in job-work arrangements remains admissible when capital goods are received, accounted for, and used in manufacture.

In a job-work arrangement, Cenvat credit on capital goods was stated to remain admissible even where the invoice named the job worker as consignee, provided the goods were received at the job worker's premises, accounted for, and used in manufacture under prescribed documentation. Rule 9 of the Cenvat Credit Rules, 2004 was applied to treat the document defect as insufficient to deny credit when the goods were identifiable and the principal manufacturer had not taken the same credit. On that basis, the demand and related penalties were held unsustainable and the impugned orders were set aside.

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Issues: Whether the appellant was entitled to Cenvat credit on capital goods received at the job worker's premises under invoices showing the job worker as consignee, and whether the consequential demand and penalties were sustainable.

Analysis: The invoices and shipping documents named the job worker as consignee and showed delivery at its premises under the principal manufacturer's instructions. The capital goods were received and used in manufacture, and the principal manufacturer had not availed credit on the same goods. Rule 9 of the Cenvat Credit Rules, 2004 permits credit on the basis of prescribed documents, and the defect alleged by the Revenue was not sufficient to deny credit when the goods were identifiable, received, and accounted for. The stated position was also supported by the Board's circular and judicial authority recognising credit entitlement in a job-work arrangement where the goods are received and used for manufacture.

Conclusion: The credit was held to be admissible and the demand was not sustainable.

Final Conclusion: The impugned orders were set aside and the appeals were allowed, with the penalties also falling along with the demand.

Ratio Decidendi: In a job-work arrangement, Cenvat credit cannot be denied merely because the invoice names the job worker as consignee, if the goods are duly received, accounted for, and used in manufacture in accordance with the prescribed documentation.

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