Cenvat credit on stock transfer inputs upheld despite no sale, as duty-paid materials remained eligible under settled precedent.

Cenvat credit was held admissible on duty-paid inputs received from a sister concern on stock transfer basis, because the absence of a sale did not by itself disqualify credit. The Tribunal noted that the Department's objection rested on Rule 57AE(3) of the Central Excise Rules, 1994 and the contention that inputs must be purchased through sale, but earlier decisions had already settled that duty-paid inputs transferred on stock transfer can still qualify. On that basis, the Revenue's challenge failed and the credit claim was upheld.

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Issues: Whether Cenvat credit was admissible on duty-paid inputs received from a sister concern on stock transfer basis, when the Department objected that the inputs were not purchased by way of sale.

Analysis: The respondent had received duty-paid raw materials on stock transfer basis and had availed credit for the relevant period. The Revenue relied on Rule 57AE(3) of the Central Excise Rules, 1994 to contend that credit was available only where inputs were purchased and used. The Tribunal noted that the only objection was the absence of sale, and that the issue had already been settled by earlier decisions holding that credit is available on duty-paid inputs received on stock transfer basis.

Conclusion: Cenvat credit was admissible, and the Revenue's appeal was rejected.

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