Cenvat credit on transit sale inputs cannot be denied for minor procedural defects when duty-paid goods and valid documents are received.

Cenvat credit could not be denied where duty-paid inputs moved directly from the manufacturer to the user under the manufacturer's invoice through an intermediate buyer, because the invoice remained a valid duty-paying document and no separate invoice was required for transit sale. The circular also clarified that persons involved in such transit sale need not obtain registration. Since the appellant received the inputs and supporting documents and used them in manufacture, minor procedural defects or the intermediary's lack of registration did not defeat credit; denial of Cenvat credit was therefore unjustified.

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Issues: Whether Cenvat credit could be denied when inputs were received directly by the appellant from the manufacturer under the manufacturer's invoice through an intermediate buyer, and whether the absence of registration of the intermediary or alleged invoice defects defeated credit.

Analysis: The applicable circular clarified that in transit sale, goods may move directly from the manufacturer to the user on the manufacturer's invoice, which serves as a valid duty-paying document, and no separate invoice is required under the relevant rule. The circular also clarified that persons participating in such transit sale need not get themselves registered. The appellant had received duty-paid inputs and the corresponding documents, and the inputs were used in manufacture. In such circumstances, minor procedural lapses or the presence of an intermediate buyer without registration could not justify denial of credit when substantive conditions were satisfied.

Conclusion: Denial of Cenvat credit was not justified, and the appellant was entitled to credit.

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