Transitional Cenvat credit cannot be denied for delayed declaration where duty-paid documents and substantive conditions are satisfied.

Transitional Cenvat credit under Rule 9A could not be denied merely because the declaration of stock of inputs was filed late, where the assessee held duty-paid documents and the substantive conditions for the credit were otherwise satisfied. The provision was treated as a transitional measure linked to the levy of excise duty on grey fabrics, and belated filing did not defeat entitlement to credit on these facts. Non-compliance with the prescribed time limit could, however, attract penal consequences. Credit denial was therefore set aside, the penalty was reduced, and the consequential order based on utilisation of the denied credit was also set aside.

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Issues: Whether credit under the transitional provision could be denied for delayed filing of the declaration despite availability of duty-paid documents and stock of inputs on the relevant date.

Analysis: Rule 9A of the Cenvat Credit Rules, 2002 was treated as a transitional provision introduced in consequence of levy of excise duty on grey fabrics. The rule required a declaration of stock of inputs by the prescribed date and availability of documents evidencing actual payment of duty. The documents were available and the declaration had been filed, though belatedly for stated reasons. On these facts, the delayed declaration did not justify denial of credit, but it did warrant penal consequences.

Conclusion: Credit could not be denied on the ground of delayed declaration, and the assessee remained liable only to a reduced penalty.

Final Conclusion: The denial of credit was set aside, the penalty was reduced, and the connected order passed on the basis of utilisation of the denied credit was also set aside.

Ratio Decidendi: Where the substantive conditions for transitional credit are satisfied and the required declaration is filed belatedly, credit should not be denied solely for delay, though a penalty may be imposed for non-compliance with the prescribed time limit.

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