Cenvat credit on capital goods remains admissible despite leased premises and later registration regularisation.

Cenvat credit on capital goods used in interconnected premises was treated as admissible where the goods were employed for manufacture of dutiable final products, remained under the assessee's ownership, and were not alienated. The text states that credit could not be denied merely because the goods were installed in leased premises or because common registration was pending, since the appellant had sought regularisation and later corrected the records after separate registration. The governing principle applied is that Cenvat credit serves to prevent duty cascading and should not be refused on a purely procedural ground when substantive use in manufacture is established.

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Issues: Whether Cenvat credit and re-credit on capital goods used in interconnected premises could be denied merely because the goods were installed in a lease premises or because common registration was pending.

Analysis: The capital goods were used for the manufacture of dutiable final products and were never alienated. The appellant had applied for common registration before taking credit and later regularized the records when separate registration was obtained. The governing principle applied was that Cenvat credit is meant to avoid cascading and cannot be denied on a purely procedural ground where the goods are used in or in relation to manufacture and the ownership remains with the assessee.

Conclusion: The denial of credit was not sustainable and the credit re-credited in the main unit was admissible.

Final Conclusion: The impugned order was set aside and the appeal succeeded with consequential relief.

Ratio Decidendi: Cenvat credit on capital goods cannot be denied where the goods are used in or in relation to manufacture for the assessee's own operations and are not alienated, even if their movement or registration is regularized later as a procedural matter.

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