Cenvat credit on diverted raw materials denied where vouchers were endorsed after purchase for an exempt unit.

Cenvat credit was not admissible where duty-paid raw materials were purchased for an area-based exempt unit and later diverted to another unit through endorsement of vouchers. The Tribunal held that the Cenvat Credit Rules, 2004 did not permit such voucher endorsement, and no supporting precedent was shown. Because the goods had already reached the exempt unit's chain, subsequent diversion could not cure the defect. Allowing credit in these circumstances would amount to a double benefit not contemplated by law, so the denial of credit was sustained.

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Issues: Whether the appellant, having availed area based exemption at the Haridwar unit, was entitled to claim Cenvat credit on duty paid raw materials diverted to the Malanpur unit through endorsement of vouchers.

Analysis: The appellant's Haridwar unit was operating under area based exemption. The Tribunal noted that the Cenvat Credit Rules, 2004 did not provide for endorsement of vouchers and no supporting case law was shown to justify credit in such circumstances. Since the raw material was purchased for the exempted unit and the transaction had reached its destination, the subsequent diversion to another unit could not cure the defect. Allowing credit in the exempt unit's chain would amount to granting a double benefit, which the law does not contemplate.

Conclusion: The appellant was not entitled to Cenvat credit, and the impugned order was rightly sustained.

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