Cenvat credit dispute remitted for fresh consideration of cheque payments, receipt of goods, RG-1 entries and alleged flow back of funds.

The Tribunal's order was set aside and the matter remitted for fresh adjudication because the assessee's specific defence had not been examined. The Court required consideration of the claim that invoices were paid by cheque, inputs were received and used in manufacture, finished goods were duly entered in RG-1 and duty was paid on them. It also directed scrutiny of whether the bank-account material actually showed any flow back of funds from the supplier to the assessee or established bogus availment of credit. The matter was therefore sent back for reconsideration on the available and additional evidence.

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Issues: Whether the matter required remand to the Tribunal for reconsideration of the assessee's plea that the invoices were paid by cheque, the inputs were received and used in manufacture, the finished goods were duly accounted for in RG-1 and duty was paid thereon, and whether the evidence relied upon disclosed any flow back of funds or proved bogus availment of credit.

Analysis: The appeal was disposed of on the view that the Tribunal had not examined the assessee's specific case based on cheque payment, production records and payment of duty on finished goods. The Court found that these aspects, together with the supporting material to be produced by the assessee, needed fresh consideration. It also required examination of whether the bank-account material relied upon in the notice established any flow back of funds from the supplier to the assessee. In these circumstances, the proper course was to set aside the Tribunal's order and remit the matter for adjudication afresh.

Conclusion: The matter was remitted to the Tribunal for fresh adjudication after considering the assessee's evidence on receipt of goods, manufacture, RG-1 entries, duty payment and alleged flow back of funds.

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