Cenvat credit on sister-unit inputs allowed despite "procured" versus "purchased" wording, as substantive use and duty payment prevailed.

Duty-paid inputs received from a sister unit and used in manufacture could not be excluded from Cenvat credit merely because Rule 7(4) then used the word "purchased" rather than "procured". The amendment substituting "procured" was treated as reflecting the legislative intent, and the rule was construed to preserve substantive credit entitlement over a technical wording objection. Cenvat credit was therefore held admissible and the denial of credit was set aside in favour of the assessee.

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Issues: Whether Cenvat credit could be denied on inputs received from a sister unit merely because the inputs were "procured" and not "purchased" during the relevant period under Rule 7(4) of the Cenvat Credit Rules, 2002.

Analysis: The inputs were admittedly received from the sister unit under duty-paid invoices and were used in manufacture. The only objection was based on the wording of Rule 7(4), which then referred to inputs "purchased by the manufacturer". The corresponding amendment substituting the word "procured" for "purchased" was treated as reflecting the legislative intent, and the Tribunal followed its earlier view that the credit entitlement could not be defeated on this technical ground when the duty-paid inputs were actually received and used.

Conclusion: Cenvat credit was held admissible and the denial of credit was set aside in favour of the assessee.

Ratio Decidendi: Where duty-paid inputs are received from a sister unit and used in manufacture, Cenvat credit cannot be denied merely because the inputs were procured rather than purchased, since the credit rule must be construed in light of its substantive purpose and legislative intent.

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