Cenvat credit on valid invoices cannot be denied merely because the input supplier's duty assessment is questioned.

Cenvat credit may not be denied where the assessee relies on valid prescribed documents, including invoices issued by a registered dealer, and the duty shown on those invoices has been paid. The Tribunal noted that Rule 9(1) permits credit on such documents and that the department could not reject the credit merely because it questioned the lower duty assessment of the input supplier. The principle applied was that jurisdictional officers for the final product manufacturer cannot dispute assessments made by officers dealing with the input supplier. On that basis, the denial of credit was held unsustainable.

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Issues: Whether Cenvat credit could be denied to the assessee on the ground that the original manufacturer had paid duty at a lower rate, despite the assessee having taken credit on the basis of invoices issued by a registered dealer and the duty shown in those invoices having been paid.

Analysis: Rule 9(1) of the Cenvat Credit Rules permits availment of credit on the basis of prescribed documents, including invoices. The assessee took credit on invoices issued by a registered dealer, and the duty payment at 12% by the intermediary manufacturer was not disputed. Rule 3(1)(i) was considered, but the decisive factor was that the credit was supported by proper documents and the duty shown on the invoices had been paid. The Tribunal also relied on the principle that excise authorities having jurisdiction over the final product manufacturer cannot dispute assessments made by officers having jurisdiction over the input supplier.

Conclusion: The denial of credit was not sustainable. The assessee was entitled to the credit claimed.

Final Conclusion: The impugned order was set aside and the appeal succeeded with consequential relief.

Ratio Decidendi: Cenvat credit cannot be denied when it is taken on the basis of valid prescribed documents and the duty reflected in those documents has been paid, merely because the department seeks to question the assessment of the input supplier.

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