Cenvat credit on endorsed invoices accepted, with denial, penalty, and interest set aside once credit was found admissible.

Cenvat credit was treated as admissible where duty-paid goods were received under an invoice originally issued to a trader and endorsed in favour of the appellants. The analysis relied on the departmental circular supporting credit in endorsed-invoice transactions and on the surrounding facts showing that credit should not be denied merely because of the transaction's form. Once credit was allowed, the consequential penalty and interest had no separate basis and were also set aside.

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Issues: Whether Cenvat credit was admissible to the appellants on goods received under an endorsed invoice, and whether the denial of credit along with consequential penalty and interest was sustainable.

Analysis: The invoice stood in the name of the trader and was endorsed in favour of the appellants. The relevant departmental circular was treated as supporting credit where duty-paid goods are received on endorsement, and the surrounding facts showed that the appellants should not be denied credit merely because of the form of the transaction. Once the credit issue was resolved in favour of the appellants, the foundation for the penalty and interest also fell away.

Conclusion: Cenvat credit was held admissible to the appellants, and the denial of credit, penalty, and interest was set aside in their favour.

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