In a recent ruling, the CESTAT Bangalore held that Cenvat Credit on the amount of Service Tax paid on the immovable property to his job worker.
Assessee rented out premises for carrying out job working activity by his job worker. the said job worker is functioning under the clauses of Notification No.214/86-CE. The said notification exempts specified items from the levy of central excise duty if manufactured in a factory as a job work and used in the manufacture of final products.
Assessee claimed Cenvat Credit on the amount of service tax paid on the rental amount. However, the Revenue exempted the same on ground that the same was not used by the appellant but appellants job worker.
The bench noted that the lower authorities erred in not appreciating the correct position of the law as per Rule 3 of CENVAT Credit Rules, 2004.
“The said provisions of Rule 3(1) of the CENVAT Credit Rules, 2004 specifically provided for availment of CENVAT credit by a manufacturer or producer of final products in respect of any, discharge of duties or taxes or cess paid on any input or input services, as the case may be, used in the manufacture of intermediary products, by a job worker availing benefit of exemption specified in the Notification No.214/86-CE of Government of India and the said goods are received by the manufacturer for use in or in relation to manufacture of final product. It is undisputed that the case in hand, appellant has received back the intermediary products on which job working has been undertaken by the job worker who has followed provisions of Notification No.214/86-CE.”
Read the full text of the Order below.
