Cenvat credit on wire rods used in wire drawing held admissible after retrospective amendment and Board circular

Credit on wire rods used for drawing wire was treated as admissible for the relevant period because the Board circular and retrospective amendment to the Cenvat Credit Rules were understood to regularise input-stage credit on wire rods and permit its use in the wire drawing process. On that basis, denial of credit merely because the input was converted into wire was not justified, and the Revenue's challenge failed.

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Issues: Whether credit on wire rods used for drawing of wire was admissible for the relevant period in view of the Board circular and retrospective amendment to the Cenvat Credit Rules.

Analysis: The dispute related to the period from 29-5-2003 to March 2004, which was covered by the Board circular relied upon by the respondent. The circular explained that the retrospective amendment was intended to regularize credit taken at the input stage on wire rods and to allow its utilization in the wire drawing process. In these circumstances, no basis remained to deny the credit merely on the ground that the input was used in drawing wire.

Conclusion: The credit was held admissible and the Revenue's challenge failed.

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