Input credit on stock held on 1 April 2000 was allowed where goods came from Compounded Levy Scheme units.

Credit was admissible on inputs lying in stock on 1 April 2000 where those inputs were traceable to units operating under the Compounded Levy Scheme, and the Tribunal's view was upheld on that basis. The entitlement was supported by Board's Circular No. 522/2000 dated 31 March 2000, and the credit taken was not shown to be incorrect. On those facts, no legal infirmity was found in allowing the credit, and the Revenue's challenge failed.

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Issues: Whether credit was admissible on inputs lying in stock as on 1 April 2000 when such inputs had been brought from units working under the Compounded Levy Scheme.

Analysis: The Tribunal's finding was upheld because the respondents had stock of inputs on 1 April 2000 and those inputs had come from units operating under the Compounded Levy Scheme. The order also relied on Board's Circular No. 522/2000 dated 31 March 2000. On those facts, the credit taken was not shown to be incorrect, and no legal infirmity in the Tribunal's conclusion was found.

Conclusion: Credit was held to be admissible on the inputs lying in stock on 1 April 2000, and the challenge by the Revenue failed.

Ratio Decidendi: Where inputs lying in stock on the relevant date are traceable to units covered by the Compounded Levy Scheme and the entitlement is supported by the applicable circular, credit cannot be denied absent any challenge to the quantum taken.

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