Cenvat credit on duty-paid invoices remains valid despite a same-day rate reduction notification.

Cenvat credit is allowable where duty has actually been paid and is reflected in valid duty-paying documents, even if a notification reducing the duty rate operated on the same day as clearance. The recipient is entitled to rely on invoices showing duty paid at the higher rate, and credit cannot be denied merely because the rate was later or simultaneously reduced. On this reasoning, the order disallowing credit was set aside and the appeals succeeded.

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Issues: Whether Cenvat credit could be denied to the recipient of goods when the supplier had issued duty-paid invoices showing duty at 16% on the date of clearance, notwithstanding a notification reducing the duty rate on that day.

Analysis: The credit scheme operates on the basis of duty actually paid and reflected in the duty-paying documents. The invoices in question showed duty paid at 16%, and the recipient availed credit on that basis. Since the duty had in fact been paid and accepted, denial of credit at the recipient's end was not justified merely because the rate had been reduced by notification on the same day.

Conclusion: The credit could not be denied to the assessee, and the assessee was entitled to avail the credit.

Final Conclusion: The order denying credit was set aside and the appeals succeeded.

Ratio Decidendi: Credit under the Cenvat scheme is allowable on the basis of duty actually paid and evidenced by valid duty-paying documents, and cannot be denied to the recipient merely because the duty rate was subsequently or simultaneously reduced.

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