Deemed Cenvat credit on opening stock upheld under the 2000 notification, not limited to actual duty paid

Cenvat credit on inputs in stock as on 1-4-2000 was governed by the then-applicable credit scheme and Notification No. 29/2000-C.E. (N.T.). The notification was read as allowing deemed credit at 12% of the invoice price, without limiting entitlement to the actual duty reflected in the documents. The contemporaneous circular was treated as consistent with credit on stock held on 1-4-2000, provided duty-paying documents were available. On that construction, actual duty-paid credit alone could not be imposed in place of the deemed credit mechanism.

---

---

Issues: Whether the appellant was entitled to Cenvat credit on inputs lying in stock as on 1-4-2000 at the deemed credit rate of 12% under Notification No. 29/2000-C.E. (N.T.), or only to the actual duty paid on such inputs.

Analysis: The credit scheme applicable from 1-4-2000 governed the assessee's entitlement on that date. The notification contemplated deemed credit at 12% of the invoice price and did not restrict the credit to the actual duty reflected in the documents. The contemporaneous circular also recognised credit on stock as on 1-4-2000, subject to duty-paying documents. Reading the notification as requiring actual duty-paid credit in every case would make the deemed credit provision redundant.

Conclusion: The appellant was entitled to deemed credit at 12% of the invoice price on inputs in stock as on 1-4-2000, and not merely the actual duty paid.

---