Cenvat credit delay on Special Excise Duty is procedural, not substantive, where input receipt and duty payment are undisputed.

Cenvat credit of Special Excise Duty was treated as allowable even when taken after receipt of inputs, because the inputs were duly received, recorded in the statutory records, and their duty-paid character was undisputed. Rule 4 of the Cenvat Credit Rules, 2002 uses the word "immediately", but the provision was treated as not imposing a rigid time bar where there was no manipulation, no dispute about receipt, and the delay arose from a bona fide belief that the credit was not available. The lapse was characterised as procedural rather than substantive, so denial of credit was not justified.

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Issues: Whether Cenvat credit of Special Excise Duty could be denied for not being taken immediately on receipt of inputs under Rule 4 of the Cenvat Credit Rules, 2002.

Analysis: The inputs were received and duly accounted for in the records, and the duty-paid character of the goods was not in dispute. The delay in taking credit arose from a bona fide impression that Special Excise Duty credit was not available, and the credit was taken later after the mistake was noticed. Rule 4 uses the expression "immediately", but the provision was treated as not prescribing a rigid time limit that would justify denial of credit in the absence of manipulation or disputed receipt of inputs. The lapse was therefore procedural, not substantive.

Conclusion: Cenvat credit of Special Excise Duty could not be denied merely because it was taken later, and the assessee was entitled to the credit.

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