Cenvat credit requires proof of actual receipt of inputs; disputed cross-examination did not defeat the prima facie demand.

Cenvat credit is available only on actual receipt of inputs in the factory on the strength of supporting documents, so the assessee must establish genuine movement and delivery of goods. Where independent material showed transporter denial, vehicles incapable of carrying the scrap, admissions of delivery at Delhi, and octroi verification negating transportation for several consignments, the alleged denial of cross-examination did not by itself displace the prima facie case against the appellants. In the absence of a prima facie case, revenue protection justified a substantial pre-deposit. The appellants were required to pre-deposit 50% of the duty demand, and on compliance the balance of duty, interest, and penalties was waived and recovery stayed pending appeal.

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Issues: Whether denial of cross-examination vitiated the demand at the stay stage, and whether the appellants had made out a prima facie case for waiver of pre-deposit.

Analysis: Credit under the Cenvat Credit Rules is available only on receipt of inputs in the factory on the strength of documents, and the assessee must establish actual receipt of goods. The record contained material independent of the disputed statements, including denial by a transporter, use of vehicles incapable of carrying the scrap, admissions that delivery was made at Delhi, and verification from the Octroi authorities indicating that the alleged transportation had not occurred in respect of several consignments. On that basis, the alleged denial of cross-examination did not cause prejudice sufficient to dislodge the prima facie case against the appellants. In the absence of a prima facie case, revenue protection justified a substantial pre-deposit.

Conclusion: The appellants were directed to pre-deposit 50% of the duty demand within the stipulated time, and on compliance the balance of duty, interest and penalties stood waived and recovery stayed during pendency of the appeal.

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