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2017 (7) TMI 985 - AT - Central ExciseCENVAT credit - input credit distribution - job-work - the Service Tax credit taken by Howrah unit on the basis ISD Invoice/Challan issued by the head office (Service Distributor) has been denied under Rule 7(b) of the Cenvat Credit Rules as the goods manufactured by the Bhadreawar unit were exempted vide N/N. 8/2005-ST dated 01.03.2005 - Held that: - Rule 4(5)(a) provides that Cenvat Credit on inputs shall be allowed even if any inputs as such or after being partially processed are sent to a job worker and after re-processing therefrom are received back by the manufacturer within the stipulated period - Thus, it is clear that the processed material of the Bhadreshwar Unit has been sent back to the Howrah unit who used it in the manufacture of the final product and cleared on payment of duty. It cannot be said that the Bhadreshwar Unit is exclusively engaged in manufacture of the exempted goods - Rule 7(b) of CCR debarred the distribution of credit of Service Tax attributable to Service Tax used by one or more units exclusively engaged in the manufacture of exempted goods or providing of exempted services shall not be distributed. Rule 4(5)(a) has not given any exemption from the levy of duty on the job-worked material. Therefore, the findings of the lower authorities cannot be sustained. Appeal allowed - decided in favor of appellant.
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