CENVAT credit on stock and post-amendment manufacture accepted where duty payment and stock correlation were established.

CENVAT credit on automobile parts lying in stock and received after packing, repacking, relabelling and affixing of MRP became manufacture under the amended law was allowable where duty payment at import and on subsequent transfer was shown and the stock-to-receipt correlation was established from the records. The Tribunal noted that the earlier remand required verification of documents available with both sides, and that the available material was sufficient despite incomplete implementation of that direction. On that factual basis, the denial of CENVAT credit was not sustained and the claimed credit was allowed.

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Issues: Whether the appellant was entitled to CENVAT credit on goods lying in stock and subsequently received after the activity of packing, repacking, relabelling and affixing of MRP on automobile parts became manufacture under the amended law.

Analysis: The dispute arose from the amendment that brought packing, repacking, relabelling and affixing of MRP on automobile parts within the ambit of manufacture from 01.06.2006. The matter had earlier been remanded with a specific direction to verify records available with both the appellant and the Department concerning import, storage and distribution of parts. The denial was not sustained because the record indicated duty payment at the import stage and on subsequent transfer, and the appellant had placed documents showing correlation of stock lying on the relevant date with the goods received thereafter. The prior remand direction was not duly implemented in full, and the available materials were sufficient to establish entitlement to credit.

Conclusion: The appellant was held entitled to the credit claimed, and the denial of CENVAT credit was set aside.

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