CENVAT credit on supplementary invoices remains admissible where no fraud-based proceedings against the supplier are shown.

CENVAT credit on supplementary invoices issued after the supplier later discharged short-paid duty was treated as admissible because the record did not show any show cause notice to the supplier invoking the first proviso to Section 11A of the Central Excise Act, 1944 for fraud, collusion, wilful misstatement or suppression of facts. In the absence of evidence that the supplier had been proceeded against on those statutory grounds, the department could not deny credit on that basis. The related demand of interest under Rule 13 of the CENVAT Credit Rules, 2002 also failed on the same footing, and the Revenue's challenge was rejected.

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Issues: Whether CENVAT credit was admissible on supplementary invoices issued by the supplier of inputs when duty short-paid by the supplier was later discharged, and whether the Revenue could deny such credit in the absence of evidence that the supplier was proceeded against under the first proviso to Section 11A of the Central Excise Act, 1944.

Analysis: The credit taken on supplementary invoices was challenged on the ground that the supplier had short-paid duty because of a lower assessable value. The record did not show that any show cause notice had been issued to the supplier invoking the first proviso to Section 11A for fraud, collusion, wilful misstatement or suppression of facts. In that factual setting, the appellate finding that the department had not disproved entitlement to credit on the stated statutory grounds was left undisturbed. The related demand of interest under Rule 13 of the CENVAT Credit Rules, 2002 also could not be sustained on the same footing.

Conclusion: The CENVAT credit on the supplementary invoices was held admissible, and the Revenue's challenge was rejected.

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