Cenvat credit on second stage dealer invoices cannot be denied merely because another dealer is named on the invoice.

An invoice issued by a second stage dealer remains a valid document for Cenvat credit under Rule 7(1) of the Cenvat Credit Rules, 2002. Credit cannot be denied merely because the invoice names another dealer as customer, where the inputs were received directly in the claimant's premises and the goods were duty paid. Once the factual correlation between the received inputs and the dealer's invoices is established, the disallowance is unsustainable and the credit demand and penalty cannot stand.

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Issues: Whether Cenvat credit could be denied on invoices issued by a second stage dealer merely because the invoice mentioned another dealer as the customer and payment was routed through that dealer.

Analysis: Rule 7(1) of the Cenvat Credit Rules, 2002 treated invoices issued by a first stage dealer or a second stage dealer as valid documents for availing credit. The invoices in question were issued by a second stage dealer, and there was no dispute that the inputs were received directly in the appellant's premises and that the goods were duty paid. The mention of another dealer as customer, by itself, did not invalidate the invoices where the factual co-relation between the goods received and the goods covered by the dealer's invoices was established.

Conclusion: Cenvat credit could not be denied on this ground, and the disallowance was unsustainable.

Final Conclusion: The credit demand and penalty were set aside, and the appeal succeeded.

Ratio Decidendi: An invoice issued by a second stage dealer remains a valid document for Cenvat credit, and credit cannot be denied merely because another dealer is shown as customer on the invoice, so long as the inputs are directly received and their identity with the dealer's supply is established.

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