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2014 (10) TMI 444 - HC - Central ExciseDenial of CENVAT Credit - Job work - credit availed by the Job worker on capital goods - contravention of Cenvat Credit Rules, 2001 - held that:- Cenvat credit cannot be denied on capital goods used in the manufacture of exempt intermediate products exempt from payment of duty, which are used captively in the manufacture of finished goods chargeable to duty. Cenvat credit is permissible to a job worker or even to a manufacturer at intermediate stage in respect of inputs like lubricants, soaps, chemical etc. where on final products, duty is admittedly paid. The Court held that the object of Cenvat credit is to avoid cascading effect of duty. SEIITL only manufactured the chassis, which is only a part of a TV. It is not a finished product and is only an intermediary product. We also find that SEIITL supplied intermediary product to SEIL, which manufactured the TV and paid duty on it. Consequently, it was entitled to avail Cenvat Credit in order to prevent the cascading effect, if duty was levied. We are of the opinion that SEIITL, which was the job worker was entitled to duty paid on inputs and used in the manufacture of intermediary product. Consequently, for the reasons stated aforesaid, the appeal fails and is dismissed. - Decided against Revenue.
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