CENVAT credit cannot be recovered for a later supplier discount unless the original invoice assessment is revised.

CENVAT credit taken on the basis of duty-paid invoices for received inputs remained admissible where the supplier later granted a post-year-end discount, because the original assessment under those invoices had not been revised. The Tribunal applied the principle that credit validly availed in the ordinary course cannot be recovered merely due to a subsequent price adjustment by the supplier. On that reasoning, the demand for reversal of credit, together with interest and penalties, was unsustainable and was set aside in favour of the assessee.

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Issues: Whether credit validly taken on the strength of invoices could be demanded back merely because the supplier granted discount after the end of the financial year, when the assessment on the supplier's invoices had not been revised.

Analysis: The duty credit had been availed in the ordinary course on the basis of invoices covering the inputs received. The demand was founded only on a subsequent discount allowed by the supplier after the close of the financial year. The governing principle applied was that CENVAT credit of duty reflected in the relevant invoices is admissible to the manufacturer, and a demand to recover such credit cannot be sustained unless the assessment under those invoices is revised. The Tribunal followed its earlier consistent view on similar facts and found the impugned demand, interest, and penalties unsustainable.

Conclusion: The demand for reversal of credit, interest, and penalty was not sustainable and was set aside in favour of the assessee.

Ratio Decidendi: Credit lawfully taken on the basis of duty-paid invoices cannot be recovered merely because the supplier later grants a discount, unless the original assessment relating to those invoices is revised.

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