Cenvat credit on opening stock became available once the concessional notification dropped the earlier restrictive condition.

A concessional exemption notification effective from 01.03.2003 removed the earlier bar on taking Cenvat credit under the Cenvat Credit Rules, 2002. From that date, clearances were governed by the revised notification, so credit on inputs, raw materials, and stock lying in the factory or in process on 01.03.2003 was consistent with the amended regime. The assessee was therefore entitled to the credit, and the disallowance was set aside.

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Issues: Whether, after the concessional notification effective from 01.03.2003 removed the condition prohibiting Cenvat credit, the assessee was entitled to take credit on inputs and stock available in the factory on that date and to apply the revised benefit to clearances made from that date.

Analysis: The earlier notification granted the concessional rate subject to a specific bar on taking credit under the Cenvat Credit Rules, 2002. The subsequent notification effective from 01.03.2003 continued the concessional rate but omitted that condition. Once the restrictive condition ceased to apply from the date of the new notification, clearances made on and after that date were governed by the new dispensation. The credit taken on raw materials and inputs lying in stock or in process on that date was therefore consistent with the revised regime.

Conclusion: The credit taken by the assessee was held to be proper, and the disallowance was set aside.

Final Conclusion: The appeal succeeded on the basis that the amended exemption structure from 01.03.2003 entitled the assessee to the benefit of Cenvat credit in respect of stock and inputs available from that date.

Ratio Decidendi: Where a concessional exemption notification continues the benefit but omits an earlier restrictive condition, the revised notification governs clearances from its effective date and the omitted restriction cannot be carried forward to deny credit on opening stock or inputs then available.

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