Modvat credit cannot be denied merely because the assessee is a job worker if duty-paid input conditions are satisfied.

Modvat credit cannot be denied solely because the recipient is described as a job worker if the inputs are received under duty-paid gate passes and the scheme conditions are otherwise satisfied. Duty payment was not in dispute, and there was no objection to receipt, coverage, or utilisation of the inputs and resultant outputs under the Modvat framework. The decisive factor was compliance with the prescribed Modvat requirements, which was found to exist, making the job-worker description legally irrelevant for denial of credit.

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Issues: Whether Modvat credit could be denied merely because the assessee was described as a job worker, when the inputs were received on duty-paid gate passes and the Modvat conditions were otherwise complied with.

Analysis: The goods were received under gate passes, duty payment was not in dispute, and there was no objection to the receipt, coverage, or utilisation of the inputs and outputs under the Modvat scheme. The mere description of the assessee or the other party as a job worker was held to be irrelevant, because the rules do not prohibit credit on that ground alone. The decisive consideration was compliance with the Modvat requirements, which was found to exist.

Conclusion: Denial of Modvat credit on the sole ground that the assessee was a job worker was not sustainable, and the assessee was entitled to the benefit.

Ratio Decidendi: Credit under the Modvat scheme cannot be refused solely because the recipient is described as a job worker if the statutory conditions for receipt and utilisation of duty-paid inputs are otherwise satisfied.

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