Cenvat credit on transferred inputs allowed where duty-paid goods were received for manufacture, despite not being booked as purchases.

Cenvat credit on duty-paid inputs transferred from one unit to another cannot be denied merely because the inputs were not shown as purchased in the books. Rule 4 of the Cenvat Credit Rules, 2002 allows credit on inputs received in the factory, and entitlement depends on receipt for manufacture of final products, not on whether the inputs are described as purchased or procured. The substitution of "purchased" with "procured" by Notification No. 13/2003-CE (N.T.) was treated as clarificatory regarding record-keeping, not as a substantive restriction on credit. The assessee was therefore entitled to the credit.

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Issues: Whether cenvat credit could be denied merely because the inputs were transferred from one unit to another and were not reflected as purchased in the books of account.

Analysis: The disputed inputs were duty paid and moved from one unit to another for use in the manufacture of final products. Rule 4 of the Cenvat Credit Rules, 2002 permits credit on inputs received in the factory, and the eligibility to credit does not turn on whether the goods were described as purchased or procured. The substitution of the word "purchased" with "procured" by Notification No. 13/2003-CE (N.T.) dated 01.03.2003 was treated as clarificatory of the nature of information to be maintained and not as a restriction on availment of credit.

Conclusion: Cenvat credit could not be denied on the ground that the inputs were transferred between units rather than purchased, and the assessee was entitled to the credit.

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