Cenvat credit on inputs and packing material cannot be denied merely because the goods were not purchased by the user-unit.

Cenvat credit on inputs and packing material cannot be denied merely because the goods were not purchased by the appellant, where duty-paid materials were received under invoices in the appellant's name and used in manufacture of the final product. The decisive consideration is receipt and use of the inputs for manufacture, not the form of the procurement transaction. On that basis, credit was held admissible to the job worker engaged in repacking lubricating oil on behalf of the principal manufacturer.

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Issues: Whether Cenvat credit on inputs and packing material could be denied merely because the goods were not purchased by the appellant, when they were received under invoices in the appellant's name and used in the manufacture of the final product.

Analysis: The appellant was engaged in repacking lubricating oil on job work basis and the inputs as well as packing material were supplied by the principal manufacturer on stock transfer basis. The invoices stood in the appellant's name, with a notation that the goods were on account of the principal manufacturer. The relevant consideration was receipt of duty paid inputs and packing material for use in the manufacture of the final product, and not the form of purchase transaction.

Conclusion: Cenvat credit could not be denied on the ground that the appellant had not purchased the goods; the credit was admissible.

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