Cenvat credit cannot be denied for procedural delay where inputs were received, used, and duty was duly paid.

Cenvat credit could not be denied where imported inputs had suffered countervailing duty, were received and used in manufacture before the credit transfer, and the transfer invoice was otherwise authentic. The absence of production in the June return did not defeat the credit, because documentary evidence supported the explanation that the raw materials were consumed in May and the later invoicing reflected only a procedural delay. Payment of interest for delayed issuance further indicated that the lapse was procedural rather than substantive. The credit was therefore not liable to reversal on the basis of the June ER-6 position or the timing of the invoice.

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Issues: Whether Cenvat credit taken by Unit-II could be denied merely because the credit was transferred through invoice in June 2011 and no manufacture was reflected in the June ER-6 return, when the inputs had already been received and used in May 2011 and the relevant duty and interest had been paid.

Analysis: The imported goods had suffered countervailing duty, were received by Unit-I, and were later transferred to Unit-II. The authenticity of the invoice transferring credit was not in dispute. Documentary evidence supported the appellant's explanation that the raw materials were received and used in manufacture in May 2011 itself, and the absence of production in June was a plausible consequence of the timing of the transfer of credit. The payment of interest for delayed issuance of the invoice further showed that the lapse was procedural rather than substantive.

Conclusion: The denial of Cenvat credit was unjustified, and the credit could not be reversed on the basis of procedural delay in invoicing or the June return position.

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