2014 (2) TMI 769

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....t and imposing penalty of equivalent amount under Rule 15 of the CENVAT Credit Rules, 2004 read with Section 78 of the Finance Act, 1994. 2. The factory of the appellant, situated at Sarigam, District Valsad (Gujrat), is engaged in the manufacture of Polyester Chips, Lump Waste, and Polymer Waste falling under Chapter 39 of the Central Excise Tariff Act, 1985 and availing the facility of CENVAT Credit on inputs, capital goods and input services under the provisions of the CENVAT Credit Rules, 2004. Apart from manufacturing their own Polyester Chips, the appellant also manufactured Polyester Chips on job work basis out of raw materials received from their own factory , located at Athola, Silvasa and sent back the same to their Athola fact....

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....case laws in support of his argument that CENVAT Credit of input services is also admissible to the appellant even if goods are cleared under exemption Notf. No. 214/ 86 CE dated 25.03.1986. (a) Polycab Industries Vs. CCE-[2010 (19) STR 585 (Tri. Ahmd.)]. (b) Laakoonaa Reactions Vs. CCE, Ahmedabad-I -[Final Order No. A/ 497-498/WBZ/ AHD/ 2010 dated 13.05.2010]. (c) Polyfab Industries Vs. Commissioner of Central Excise and Customs, Daman, Vapi - [Final Order No. A/ 302/ WBZ/ AHD/ 2009 dated 22.01.2009 & S/258/ WBZ/ AHD/ 2009 dated 22.01.2009]. 4. Shri J. Nagori (AR), appearing on behalf of the Revenue argued that when processes undertaken by the appellant amount to manufacture, then no service tax is payable under the 'Business A....

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.... (43) RLT 680 (Tri- Del.)]. We find that in the matter of Jindal Polymers (supra), a division of Jindal Polyester Ltd., were engaged in the manufacture of polyester/polymer chips falling under chapter 39 on job work basis for Jindal Polyester Ltd. They received main inputs viz. DMT and MEG from Jindal Polyester Ltd. for the purpose of processing/job work in terms of Notification 214/86-C.E., dated 25-3-1986, on which no credit was taken by them. They also procured certain other inputs viz. furnace oil, ammonia, titanium oxide, etc., for use in processing of inputs received from M/s. Jindal Polyester and availed credit on the above inputs. The processed goods i.e. polyester/polymer chips were cleared without payment of duty under the said No....

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....t factory for manufacture of job-worked goods under Notf. No. 214/ 86 CE. Though the Larger Bench judgment in the case of Sterlite Industries (I) Ltd. was delivered with respect to Rule 57C of the Central Excise Rules, 1944, but the ratio of the same has been held to be applicable to the service tax credit availed by the job worker under Notification No. 214/ 86- CE as per the decisions of this Bench in the case of Polycab Industries Vs. CCE, Daman (supra), and Laakoonaa Reactions Vs. CCE, Ahmedabad-I (supra). 6.3. The Revenue has also argued that the production or processing of raw materials, which amounted to manufacture in terms of Section 2 (f) of the Central Excise Act, 1944, was an exempted or non-taxable service during the materia....