Cenvat credit on imported capital goods cannot be denied for time bar where no statutory limit applied to receipt and claim.

Cenvat credit on imported capital goods was examined against the rules in force when the goods were received in 1994-95. The text states that no statutory time limit then governed availment of such credit, so credit could not be denied as time-barred or by applying Rule 7(1)(b) of the Cenvat Credit Rules, 2002. It further notes that procedural non-compliance alone could not defeat the credit claim, that the later show cause basis was not found in the notice, and that the record did not support the adverse findings against the assessee. The stated result was that the credit entitlement was sustained and no substantial question of law arose.

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Issues: Whether Cenvat credit on imported capital goods could be denied as time-barred or under Rule 7(1)(b) of the Cenvat Credit Rules, 2002, when the goods were received in 1994-95 and duty was finally settled later.

Analysis: The credit claim was examined in the context of the rules prevailing when the capital goods were received. The order recorded that there was no statutory provision prescribing a time limit for taking credit on capital goods, that procedural non-compliance could not by itself defeat credit, and that Rule 7(1)(b) was not attracted on the facts. It was also noted that the show cause notice did not contain the basis later relied upon to deny credit, and the findings against the assessee were unsupported by the record.

Conclusion: The credit could not be denied on the ground of time bar or on the basis of Rule 7(1)(b); the appeal was therefore dismissed and the assessee's entitlement to credit was sustained.

Final Conclusion: No substantial question of law arose, and the challenge to the grant of Cenvat credit failed.

Ratio Decidendi: In the absence of a specific statutory prohibition, credit on capital goods is governed by the rules applicable when the goods are received, and it cannot be denied merely on procedural grounds or by importing a time limit not found in the governing rules.

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