Cenvat credit accrual on receipt of inputs is not lost by a later register entry under a prospective amendment.

Cenvat credit accrues when the input or service is received, and a later accounting entry in the credit register does not defeat that accrued right. The six-month restriction introduced by amendment was applied prospectively, so it could not be used to deny credit on invoices received before the amendment merely because the register entry was made later. The settled position applied was that a substantive credit entitlement cannot be curtailed by subsequent procedural or accounting adjustments. The disallowance of credit was set aside and entitlement to the credit was confirmed.

---

---

Issues: Whether the amendment introducing a six-month restriction for availing Cenvat credit operated prospectively, and whether credit could be denied merely because the corresponding accounting entry in the credit register was made beyond the stipulated period.

Analysis: The governing principle applied was that the right to credit accrues when the goods or services giving rise to the credit are received, and that such accrued right is not defeated by the manner or timing of subsequent accounting entries in the credit register. The amended restriction was treated as prospective from its effective date, so it could not be applied to deny credit on invoices received before that date merely because the entry in the second part of the register was made later. Reliance was placed on the earlier settled position that credit, once accrued under the existing scheme, cannot be curtailed by a later procedural or accounting adjustment.

Conclusion: The amendment was held to be prospective, and the appellant was held entitled to the Cenvat credit.

Final Conclusion: The disallowance of credit was set aside, and the appellant's entitlement to the credit was confirmed.

Ratio Decidendi: A substantive credit right accrues on receipt of the input or service and cannot be defeated retrospectively or by the timing of a later accounting entry when the amendment imposing the restriction is prospective.

---