Cenvat credit disallowance fails where invoices and transport records confirm receipt and Revenue proves no diversion.

Cenvat credit cannot be disallowed where the assessee's claim is supported by invoices and Form ST-XXVI-A records showing entry of the goods into Himachal Pradesh, and Revenue fails to produce cogent evidence of diversion or non-receipt. The documentary record in this matter corroborated receipt of the goods, while the allegation that they were diverted after entering the State remained unproved. On that basis, the disallowance of credit was not sustainable, and the assessee was entitled to retain the credit allowed by the adjudicating authority.

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Issues: Whether the disallowance of Cenvat credit was justified in the absence of cogent evidence showing diversion of goods after entry into the State.

Analysis: The respondent's claim of credit was found corroborated by the relevant invoices and Form ST-XXVI-A records obtained from the Excise and Taxation Commissioner. The record showed that the goods covered by those invoices had entered the State of Himachal Pradesh. Revenue did not produce cogent evidence to establish that the goods, after entering the State, were diverted elsewhere and did not reach the respondent's factory.

Conclusion: The disallowance could not be sustained and the assessee was entitled to retain the Cenvat credit allowed by the adjudicating authority.

Final Conclusion: The Revenue's challenge to the grant of Cenvat credit failed.

Ratio Decidendi: Where documentary material corroborates receipt of goods and Revenue fails to prove diversion or non-receipt with cogent evidence, disallowance of Cenvat credit is not warranted.

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