CENVAT credit cannot be denied on uncorroborated statements when documentary records prove receipt and use of inputs.

CENVAT credit could not be denied where the assessee substantiated receipt and use of inputs through invoices, transport documents, job-work challans, labour bills, purity-check records and other statutory records showing movement of goods to job workers and return of processed goods for manufacture. The supplier's duty payment and return filings during the relevant period further supported the transaction trail. Statements of third parties, relied on by the lower authorities, were not independently corroborated and did not displace the documentary evidence. On these facts, the condition of actual receipt of inputs and compliance with the credit scheme was satisfied, and denial of CENVAT credit was unsustainable.

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Issues: Whether CENVAT credit could be denied on the allegation that inputs were not actually received and the invoices were merely paper invoices.

Analysis: The assessee produced invoices, transport documents, job-work challans, labour bills, purity-check records and related statutory documents showing movement of goods to job workers and receipt of processed goods back for manufacture of final products. The record also showed duty payment and filing of returns by the supplier during the relevant period. The adverse conclusion of the lower authorities rested mainly on statements of third parties, but those statements were not supported by independent corroboration and did not displace the documentary evidence produced by the assessee. On these facts, the requirement of receipt of inputs and compliance with the credit scheme was held to be satisfied.

Conclusion: Denial of CENVAT credit was not sustainable and the assessee was entitled to the credit.

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