Cenvat credit on post-deletion invoices depends on pre-existing stock and valid registration before fresh adjudication

Cenvat credit on invoices issued after deletion of Rule 12B turned on whether traders could validly clear goods already in stock before 9 July 2004 and whether the claimant's excise registration remained valid. A Board circular stated that such pre-existing goods could still be cleared on duty-paid invoices after omission of Rule 12B. Because the record contained no finding on when the goods covered by the invoices were received and did not examine the registration issue, the existing orders were set aside and the matter was remanded for fresh adjudication with due opportunity and compliance with natural justice.

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Issues: Whether the denial of Cenvat credit availed on invoices issued after deletion of Rule 12B of the Central Excise Rules, 2002 was sustainable, and whether the matter required fresh consideration.

Analysis: The credit was disputed on the footing that the traders issuing the invoices had lost the status to discharge duty liability after omission of Rule 12B. The Board circular clarified that goods lying with the trader prior to 09/07/2004 could still be cleared on payment of duty under invoice after omission of Rule 12B. The record did not show whether the goods covered by the invoices were received by the traders before 09/07/2004, and the validity of the excise registration relied upon by the appellant was also not examined. In the absence of findings on these material aspects, the orders below could not be sustained and the matter had to be reconsidered after giving due opportunity.

Conclusion: The orders of the lower authorities were set aside and the matter was remanded for fresh adjudication after following the principles of natural justice.

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