Cenvat credit on stock-transferred inputs remains admissible where duty-paid goods are received in the factory and rule conditions are met.

Cenvat credit was available on duty-paid inputs received in the factory, and it could not be denied merely because the goods came by stock transfer from another unit rather than by purchase. The applicable credit rules treated receipt of inputs and satisfaction of the statutory record-keeping conditions as the material requirements, while the reference to the person from whom goods were purchased did not make purchase a separate eligibility condition. On that basis, credit remained admissible where the inputs were duty-paid and otherwise met the rule requirements.

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Issues: Whether Cenvat credit could be denied merely because the inputs were received by stock transfer from another unit and not by purchase.

Analysis: The relevant credit provisions allowed credit of duty paid on inputs received in the factory, and did not impose purchase as a condition precedent. The record-keeping requirement in Rule 57AE(3) referred to particulars of receipt, disposal, consumption and inventory, and the reference to the person from whom inputs were purchased did not convert purchase into a substantive eligibility condition. The governing rule therefore had to be read as permitting credit on duty-paid inputs received in the factory, whether sourced by purchase or otherwise, if the statutory conditions were satisfied.

Conclusion: Cenvat credit was admissible on the inputs received from the assessee's other unit, and the Revenue's objection based on absence of purchase was rejected.

Ratio Decidendi: For purposes of Cenvat credit under the applicable rules, receipt of duty-paid inputs in the factory is the material condition, and purchase is not an independent statutory requirement unless expressly provided.

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