Capital goods Cenvat credit remains available despite SSI-based non-registration when the earlier rules otherwise permit the claim.

Capital goods Cenvat credit was held admissible where the goods were received during the currency of the Cenvat Credit Rules, 2002, and entitlement had to be examined under Rule 3(1) read with Rule 4. The unit's SSI exemption from registration did not extinguish credit, because no rule made registration a precondition for availment, and Rule 11(1) of the Cenvat Credit Rules, 2004 preserved unutilized credit earned under the earlier regime. Rule 6(4) also did not bar credit on goods covered by a value-based exemption within the prescribed limit, so denial solely for non-registration was not justified.

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Issues: Whether capital goods Cenvat credit could be denied solely because the manufacturer was not registered under central excise law when the capital goods were received, despite the goods being received during the period governed by the Cenvat Credit Rules, 2002 and the final products being manufactured under SSI exemption.

Analysis: The capital goods were received when the Cenvat Credit Rules, 2002 were in force, and the entitlement had to be tested under Rule 3(1) and Rule 4 of those Rules. The manufacturer of excisable final products was otherwise eligible for capital goods credit, and Rule 11(1) of the Cenvat Credit Rules, 2004 protected unutilized credit earned under the earlier regime. The fact that the unit was exempt from registration because it was operating under SSI exemption did not extinguish the underlying credit entitlement, since the rules contained no provision making registration a precondition for availment of capital goods credit. Rule 6(4) also did not bar credit in a case where the goods were covered by a value-based exemption for clearances within the prescribed limit.

Conclusion: The capital goods Cenvat credit was admissible and could not be denied on the ground of non-registration.

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