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2014 (2) TMI 769 - CESTAT AHMEDABADDisllowance of CENVAT Credit - Cenvat Credit on input services availed by the Job Worker availing exemption under Notf. No. 214/ 86-CE dated 25.03.1986 - Held that:- credit availed by the job worker cannot be denied where inputs were used in the manufacture of goods which were cleared without payment of duty under Notification No. 214/ 86-CE - appellants were entitled to Modvat credit of duty paid on inputs procured on their own account & used in the manufacture of job-worked goods exempted under notification number 214/ 86 CE. CENVAT Credit of input services was admissible to the job worker clearing goods to principal manufacturer under notification number 214/ 86 CE. In view of the above, we hold that the provisions of Rule 6(1) of the CENVAT Credit Rules, 2004 cannot be invoked for denying CENVAT Credit of input services used by the appellant factory for manufacture of job-worked goods under Notf. No. 214/ 86 CE - job work activity of the appellant is amounting to manufacture and is not one of providing any ‘service’. The appellant factory cannot be both a ‘manufacturer’ and a ‘service provider’ at the same time in relation to a particular activity. It is settled proposition in central excise matters that a job worker is a ‘manufacturer’ and hence the appellant factory cannot be treated as a service provider rendering exempted/ non-taxable service for the manufacturing activity - Decided in favour of assessee.
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