Cenvat credit of service tax paid on job charges

[samaresh jana]

An assessee is having its factory lacks facility of galvanizing,while it's order is to supply galvanized goods.He sends semi finished goods to a job work painting and galvanizing. The assessee also paid service tax on the job charges. Can the assessee avail credit of that service tax paid on job charges? There is also a question that whether the assessee has to paid service tax on job charges paid for painting and galvanizing.

AI Summary

Assessee can claim Cenvat credit; job work exempt from service tax if duty paid on finished product under mega exemption. An assessee lacking galvanizing facilities sends semi-finished goods for job work involving painting and galvanizing, incurring service tax on job charges. The query is whether the assessee can claim Cenvat credit for this service tax and if service tax must be paid on the job charges. The response clarifies that job work by an intermediary is exempt from service tax under mega exemption if the principal manufacturer pays the appropriate duty on the finished product. The sale of the finished product is subject to excise tax, not service tax.