Cenvat credit on stock declarations upheld where return-based records and invoices supported substantial compliance with the disclosure requirement.

Cenvat credit on grey fabrics was treated as admissible where the assessee had filed declarations and produced income tax return and invoice-based material showing the stock position, even though there was no express intimation that stock had not changed. The stated reasoning was that the department did not verify the return value against the invoices or quarterly returns and carried out no meaningful investigation to disprove the claimed stock value. On that basis, the absence of a specific no-change statement was not enough to defeat the claim, and substantial compliance with the declaration requirement supported allowance of the credit.

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Issues: Whether the appellant was entitled to cenvat credit on the stock of grey fabrics brought into the cenvat network, in the absence of a specific intimation that there was no change in stock and in view of the declarations, income tax return and invoices produced.

Analysis: The credit dispute turned on whether the appellant had discharged the requirement of declaring the stock as on 31.03.2003 and intimating any change thereafter. The record showed that declarations had been filed and that the department had not verified the value reflected in the income tax return against the invoices or quarterly returns. The invoices produced later were not subjected to meaningful verification or forensic examination, and no investigation was carried out to establish that the stock value claimed was incorrect. In these circumstances, the absence of an express statement of no change in stock could not, by itself, defeat the claim when the declarations and return-based material otherwise reflected the same stock position.

Conclusion: The appellant had substantially complied with the declaration requirement and the cenvat credit was held to be correctly availed; the issue was decided in favour of the assessee.

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