Cenvat credit on capital goods cannot be denied for delayed declarations where the rule and circular support condonation.

Cenvat credit on capital goods could not be denied merely because declarations were filed late where the applicable circular and amended rule supported condonation of delay and the matter was pending. The rule was also read as extending credit to specified industries covered by the annexure, and the assessee fell within that category. In the absence of any departmental finding that the goods were not used in manufacture, the items were treated as eligible capital goods and relief followed on duty, penalty, and interest.

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Issues: (i) Whether Cenvat credit on capital goods could be denied on the ground that declarations were filed belatedly. (ii) Whether the disputed items were capital goods eligible for credit under the relevant excise rule.

Issue (i): Whether Cenvat credit on capital goods could be denied on the ground that declarations were filed belatedly.

Analysis: The delay in filing declarations was held to be condonable in the light of the applicable circular and the earlier Tribunal view, and the amended rule was treated as applicable to pending matters.

Conclusion: The issue was decided in favour of the assessee, and credit could not be denied merely because the declarations were filed late.

Issue (ii): Whether the disputed items were capital goods eligible for credit under the relevant excise rule.

Analysis: The rule was read as extending the benefit to specified industries covered by the annexure. Since the assessee fell within that category and there was no departmental finding that the goods were not used in manufacture, the Apex Court ruling on capital goods entitlement was applied to grant relief.

Conclusion: The issue was decided in favour of the assessee, and the items were held eligible for the benefit as capital goods.

Final Conclusion: The appeal succeeded on both grounds, and the denial of relief on the two issues was reversed with consequential relief on duty, penalty, and interest.

Ratio Decidendi: Where the applicable excise framework and circular support condonation of delay, and there is no contrary finding that the goods were not used in manufacture, credit on eligible capital goods cannot be denied.

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