TMI Blog2014 (2) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... job work basis. The Department entertained a view that the CENVAT Credit of service tax paid on input services, used by the appellant in the manufacture of goods on job work basis, exempted under Notf. No. 214/86 CE, was not admissible to the appellant in terms of the provisions of Rule 6 (1) of the CENVAT Credit Rules, 2004. Department also viewed that the appellant had rendered Business Auxiliary Service [Exempt under Notf. No. 8/ 2005 ST dated 01.03.2005 to its own factory M/s JBF Industries Limited, Athola inasmuch as the appellant undertook production or processing of goods (working upon raw material supplied by the client) on behalf of the client as mentioned in sub-clause (v) of clause (19) of Section 65 of the Finance Act, 1994, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acture Non-taxable service) and exempted goods under Notf. No. 214/ 86 CE is not admissible, and that the demand has been correctly confirmed against the appellant. 5. We have considered the submissions made at length by both sides and perused the records. 6.1. The issue involved in the present proceedings is whether the CENVAT Credit of input services taken by the appellant and used by them in the manufacture of job-worked goods (exempt under Nofn. No. 214/ 86 CE) is admissible to the appellant or not in view of the provisions contained in Rule 6 (1) of the CENVAT Credit Rules, 2004. The demand has been confirmed against the appellant on the grounds that service tax credit proportionate to the services used in the manufacture of exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Modvat credit of duty paid on inputs used in the manufacture of final products cleared at nil rate of duty is not admissible if the provisions of Rule 57CC ibid are not followed. Following the ratio of Bajaj Tempo Case [1994 (69) ELT 122], the Tribunal held in this case that the 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. This decision of the Tribunal has been affirmed by the Larger Bench decision in the matter of Sterlite Industries (I) Limited Vs. CCE, Pune [2005(68) RLT (CESTAT-LB)]. Departmental appeal filed against this order of the Larger Bench has been rejected by the Hon ble Bombay High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -taxable or exempted output service viz. production or processing of raw materials amounting to manufacture. In this context we find that the 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. Therefore, there is no force in the Revenue s contention that the appellant had rendered exempted/ non-taxable service to its sister ..... X X X X Extracts X X X X X X X X Extracts X X X X
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