CENVAT credit and extended limitation turned on documentary proof of receipt, with uncorroborated transporter statements found insufficient.

Substantial documentary evidence of receipt of inputs, including invoices from registered dealers, GRNs, statutory records and payment through account payee cheques, could not be displaced by limited transporter statements, parallel invoice numbers or minor discrepancies in vehicle details. On that record, CENVAT credit was sustained in favour of the assessees. The extended period of limitation also failed because the department did not establish fraud, collusion or suppression by the assessees; the related demands and penalties therefore could not survive. The Revenue's challenge was rejected, and the appellate finding allowing credit was upheld.

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Issues: (i) Whether CENVAT credit on inputs could be denied on the basis of alleged bogus invoices, parallel invoice numbers, and statements of a few transporters, despite GRNs, statutory records, and payment through banking channels. (ii) Whether the extended period of limitation and consequential demands and penalties were sustainable in the absence of fraud, collusion, or suppression attributable to the assessees.

Issue (i): Whether CENVAT credit on inputs could be denied on the basis of alleged bogus invoices, parallel invoice numbers, and statements of a few transporters, despite GRNs, statutory records, and payment through banking channels.

Analysis: The allegations rested largely on a limited number of transporter statements, non-service of summons on many vehicle owners, and the presence of some parallel or identical invoice numbers. The documentary record showed that the assessees had received invoices from registered dealers, maintained GRNs and statutory records, and made payments by account payee cheques. The discrepancies in a few invoices and vehicle particulars were treated as insufficient to displace the broader evidentiary record, particularly when the department had not satisfactorily established that the inputs were never received or that the assessees had acted in collusion with the suppliers.

Conclusion: Credit could not be denied on the material placed by the Revenue, and the finding allowing CENVAT credit was upheld in favour of the assessees.

Issue (ii): Whether the extended period of limitation and consequential demands and penalties were sustainable in the absence of fraud, collusion, or suppression attributable to the assessees.

Analysis: The payments, invoices, and corresponding entries were reflected in the regular books and records, and there was no material showing that any payment was returned or that the assessees had knowingly participated in any fraud. In these circumstances, the preconditions for invoking the extended period were not established, and the penal consequences based on the same foundation also could not survive.

Conclusion: The extended period and related penalties were not sustainable.

Final Conclusion: The Revenue failed to dislodge the Commissioner (Appeals)'s finding that the assessees had established receipt of inputs and bona fide availment of credit, and the appeals were rejected.

Ratio Decidendi: Substantial documentary evidence of receipt of goods and bona fide accounting entries cannot be displaced by limited, uncorroborated transporter statements or minor invoice discrepancies, and the extended period cannot be invoked without proof of fraud, collusion, or suppression by the assessee.

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