Cenvat credit under Rule 6(3)(iii) cannot be denied for absence of a formal option or implied account-maintenance .

Rule 6(3)(iii) of the Cenvat Credit Rules was read as permitting the stated mode of credit availment without requiring separate accounts for both inputs and input services. The text did not impose the restriction applied by the adjudicating authority, so denial of the benefit on that basis was unsustainable. The rule also did not require filing a declaration or exercising a formal option to claim its benefit, and any contrary assumption was incorrect. The impugned order was set aside and the matter remanded for fresh decision in light of the assessee's claim under the sub-rule.

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Issues: (i) Whether Rule 6(3)(iii) of the Cenvat Credit Rules permitted the assessee to maintain separate accounts for inputs and still avail credit in respect of input services in the manner claimed; (ii) whether the assessee was required to file a declaration or exercise a formal option to avail the benefit of that sub-rule.

Issue (i): Whether Rule 6(3)(iii) of the Cenvat Credit Rules permitted the assessee to maintain separate accounts for inputs and still avail credit in respect of input services in the manner claimed.

Analysis: The provision introduced with effect from 01.03.2011 allowed the assessee to follow the stated mode of credit availment. The adjudicating authority had proceeded on the footing that separate maintenance of accounts had to be common to both inputs and input services, but the provision itself did not impose such a restriction. The finding that the benefit was unavailable on that basis was therefore not sustainable without proper examination of the statutory text and the assessee's stand.

Conclusion: The benefit of Rule 6(3)(iii) could not be denied on the ground that separate accounts had to be maintained for both inputs and input services.

Issue (ii): Whether the assessee was required to file a declaration or exercise a formal option to avail the benefit of that sub-rule.

Analysis: The sub-rule did not prescribe any requirement of filing a declaration or option for availing its benefit. The reason recorded by the adjudicating authority that the assessee had not exercised an option was therefore incorrect. The assessee's assertion that an option had in fact been filed also required consideration on remand.

Conclusion: No formal option or declaration was required to claim the benefit of Rule 6(3)(iii).

Final Conclusion: The impugned order was set aside and the matters were remanded for fresh decision after considering the assessee's claim under Rule 6(3)(iii) and its assertion regarding separate accounts for input services.

Ratio Decidendi: Where a rule grants a credit entitlement without prescribing a formal declaration or option, such benefit cannot be denied on the basis of an implied procedural requirement not found in the text of the rule.

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