Transitional Cenvat credit cannot be denied for staged declarations when stock position remains undisputed.

Transitional Cenvat credit under Rule 9A of the Cenvat Credit Rules, 2002 could not be denied merely because declarations were filed in more than one instalment or because additional stock declarations were submitted within the extended time. The scheme was intended to permit textile units to claim credit on stock lying on the relevant date, and the later insertion of sub-rule 5 together with Notification No. 40/03-CE(NT) indicated that declarations could validly be filed up to the extended date. Where the stock position was otherwise undisputed, staged declarations did not defeat eligibility to credit, and denial on that ground was not sustainable.

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Issues: Whether transitional Cenvat credit under Rule 9A of the Cenvat Credit Rules, 2002 could be denied on the ground that the declarations were filed in more than one installment and that additional stock declarations were made within the extended period.

Analysis: The facility under Rule 9A was intended to enable textile units to avail transitional credit on stock lying as on the relevant date. The subsequent insertion of sub-rule 5 and the extension of time by Notification No. 40/03-CE(NT) showed that the scheme permitted filing of declarations up to the extended date. The Court accepted that, so long as the stock position was not in dispute, declarations filed in stages and additional declarations made within time did not defeat eligibility to credit.

Conclusion: The credit was admissible and the Revenue's objection to denial of Cenvat credit was not sustainable.

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