Cenvat credit on inputs for dutiable goods need not follow separate accounts or immediate availment where no time limit exists.

Rule 6(2) of the Cenvat Credit Rules, 2004 requires separate accounts only where credit is taken on common inputs used for both dutiable and exempted final products; if credit is restricted to inputs used for dutiable goods, that obligation does not arise. The text also states that, during the relevant period, no time limit prescribed immediate availment of Cenvat credit after receipt of inputs, so credit cannot be denied merely because it was taken later. The assessee's credit entitlement was upheld with consequential relief.

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Issues: (i) Whether separate accounts were required under Rule 6(2) of the Cenvat Credit Rules, 2004 when credit was taken only on the quantity of inputs used for dutiable final products. (ii) Whether Cenvat credit could be denied for not being availed immediately after receipt of inputs in the factory.

Issue (i): Whether separate accounts were required under Rule 6(2) of the Cenvat Credit Rules, 2004 when credit was taken only on the quantity of inputs used for dutiable final products.

Analysis: The requirement of maintaining separate accounts arises only where credit is taken on the entire inputs and those inputs are subsequently used for both dutiable and exempted final products. Where credit is restricted to the quantity of inputs used for dutiable goods, the obligation to maintain separate accounts does not arise.

Conclusion: The issue was decided in favour of the assessee.

Issue (ii): Whether Cenvat credit could be denied for not being availed immediately after receipt of inputs in the factory.

Analysis: The relevant period did not prescribe any time limit for availment of Cenvat credit after receipt of inputs, and credit could not be denied merely because it was taken after a lapse of time.

Conclusion: The issue was decided in favour of the assessee.

Final Conclusion: The Revenue's challenge failed on both grounds, and the assessee's credit entitlement was upheld with consequential relief.

Ratio Decidendi: Under Rule 6(2) of the Cenvat Credit Rules, 2004, the obligation to maintain separate accounts applies only when credit is availed on common inputs used for both dutiable and exempted outputs, and in the absence of a prescribed limitation period, credit cannot be denied merely for delayed availment.

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