Cenvat credit on alleged bogus procurement upheld where no direct evidence showed HR Coils were not actually received.

Cenvat credit on HR Coils could not be denied on the allegation of bogus procurement where the evidence did not show that the invoiced goods were not actually received or supplied. The authorised signatory confirmed receipt of the goods, while the dealers' statements referred only to fictitious dealings in CR Sheets and CR Strips and did not negate the HR Coils transactions. The invoices carried truck numbers, yet no enquiry was made of the truck owners. Collateral material from another dealer's irregularities was insufficient to disprove the respondent's receipt of the goods, so the credit claim was upheld.

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Issues: Whether Cenvat credit taken on HR Coils was inadmissible on the allegation that the purchases through registered dealers were bogus and unsupported by evidence.

Analysis: The respondent's authorised signatory stated that the goods covered by the invoices had been received. The dealers' statements referred to fictitious dealings in CR Sheets and CR Strips, but did not state that HR Coils were not purchased or supplied. No questions were put to them on HR Coils, and their statements did not support the allegation against the respondent. The invoices mentioned truck numbers, yet no enquiry was made with the truck owners. The Department relied mainly on irregularities found in Pasondia Steel's dealings in CR Sheets, but that material did not establish that HR Coils sold to the registered dealers were non-existent or not supplied.

Conclusion: The allegation of bogus procurement of HR Coils was not proved and the Cenvat credit could not be denied on that basis.

Final Conclusion: The Revenue failed to dislodge the finding that the respondent received the goods and was entitled to the credit claimed, so the departmental challenge did not succeed.

Ratio Decidendi: Denial of Cenvat credit on the ground of bogus procurement requires evidence directly showing that the goods covered by the invoices were not actually received or supplied; collateral evidence about other fictitious transactions is insufficient.

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