CENVAT credit on duty-paid coal upheld where supplier's invoice showed duty payment and prescribed documents were valid.

CENVAT credit on excise duty paid on coal could not be denied to the recipient merely because coal was exempt during the relevant period, where duty was charged in the supplier's invoice and deposited with the Government. The coal was received and used by the recipient, the supplier was registered with the excise department, and the duty payment on the supplier's clearances was not disputed by the jurisdictional authorities. On these facts, the assessment at the supplier's end could not be reopened at the recipient's end. Credit taken on valid prescribed documents and otherwise in conformity with the CENVAT scheme was held admissible, and the Revenue's challenge failed.

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Issues: Whether CENVAT credit of excise duty paid on coal could be denied to the recipient on the ground that coal was exempted during the relevant period, despite duty having been charged in the supplier's invoice and paid into the Government account.

Analysis: The disputed coal was received and used by the respondent, and the credit was availed on the basis of invoices showing excise duty payment. The supplier was registered with the excise department, and the duty payment on the clearances from the supplier's end was not disputed by the jurisdictional authorities. In these circumstances, the assessment made at the supplier's end could not be reopened at the recipient's end. Since the credit was taken on valid prescribed documents and was otherwise in conformity with the CENVAT scheme, the denial of credit was not sustainable.

Conclusion: The denial of CENVAT credit was unjustified and the Revenue's challenge failed.

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