Cenvat credit on leased factory transfer upheld where delayed invoices were treated as a technical lapse only

Cenvat credit attached to a leased unit was treated as continuing in the transferor's account and therefore transferable to the assessee under Rule 8 of the Cenvat Credit Rules, 2002. The Tribunal's factual finding that duplicate invoices were traced late and the credit was availed after 1-4-2003 was treated as a technical lapse only, not a substantive bar to credit. On those facts, the credit claim was upheld and the court found no question of law to arise.

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Issues: Whether the assessee was entitled to avail Cenvat credit on the basis of invoices relating to the leased factory and whether such credit could be treated as unutilized credit lying in the lessor's account under Rule 8 of the Cenvat Credit Rules, 2002.

Analysis: The credit arose from the transfer of the unit and was treated as belonging to the lessor unit. The delay in tracing duplicate invoices and the subsequent availment of credit after 1-4-2003 were treated as only a technical lapse. On the facts found by the Tribunal, the credit was regarded as having remained available in the account of the lessor unit and thus transferable to the respondent-assessee.

Conclusion: The claim to avail the Cenvat credit was upheld, and no question of law was found to arise.

Ratio Decidendi: Where Cenvat credit is found to exist in the account of the transferor unit and the availment is only affected by a technical lapse, the credit cannot be denied merely on that procedural defect.

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