Transitional CENVAT credit was allowed for textile stock, and a late declaration was treated as timely on the next working day.

One-time transitional CENVAT credit under Rule 9A for textile-sector stock lying on 31-03-2003/01-04-2003 was available where the assessee maintained production and clearance records and paid duty on final products. Procedural lapses in the declaration were treated as non-fatal when the revenue failed to prove that the disputed stock was received only after 01-04-2003. The declaration filed on the next working day was accepted as timely because the prescribed last date fell on a Sunday, and the next working day principle was applied by analogy to the Limitation Act. The credit was therefore allowed and the disallowance rejected.

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Issues: Whether the appellant was entitled to one-time transitional CENVAT credit under Rule 9A of the CENVAT Credit Rules, 2002 on the stock declared as lying on 31-03-2003/01-04-2003, including the declaration received on the next working day after the last date.

Analysis: The scheme introduced for the textile sector allowed one-time transitional credit on eligible stock lying on the relevant date, and the departmental circulars emphasised that procedural lapses should be ignored where the assessee maintained production and clearance records and paid duty on the final products. The records produced showed receipt, processing, and duty-paid clearance of the goods, and the revenue did not establish by evidence that the disputed stock was actually received only after 01-04-2003. The declaration received on 16-06-2003 was treated as timely because the prescribed last date fell on a Sunday and the next working day rule was applied by analogy to the Limitation Act.

Conclusion: The appellant was entitled to the transitional credit and the disallowance was unsustainable.

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