Cenvat credit reversal demands fail where revenue cannot prove availment of credit on capital goods.

Cenvat credit on capital goods was found not to have been availed by the respondent, and the demand for reversal failed for want of evidence. Concurrent findings of the lower authorities were supported by the record, while the revenue produced no material to establish availment of credit. The burden to prove the allegation remained on the revenue, and a party cannot be required to prove a negative. Reliance on records and balance-sheet entries was insufficient to displace the existing findings, so the demand was held unsustainable and the proceedings were rightly dropped.

---

---

Issues: Whether the respondent had availed Cenvat credit on the capital goods and whether the demand for reversal of such credit was sustainable.

Analysis: The concurrent findings of the lower authorities showed that the respondent had demonstrated non-availment of Cenvat credit on the capital goods. The revenue produced no evidence to establish availment of credit. A party cannot be required to prove a negative, and the burden remained on the revenue to support the allegation with evidence. The reliance placed on records and balance-sheet entries was insufficient to displace the findings already recorded.

Conclusion: The demand was not sustainable, and the proceedings were rightly dropped.

---