Tribunal overturns denial of Cenvat credit due to lack of verification, grants appeal

The Tribunal set aside the order denying Cenvat credit to the appellant for inputs received from a supplier, as the investigation did not include cross-examination or inspection at the appellant's premises. Without verifying the supplier's claims through cross-examination, the denial of credit was deemed unsustainable, leading to the appeal being allowed and consequential relief granted.

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Issues:
Appeal against denial of Cenvat credit based on investigation of goods supplied by a first stage dealer.

Analysis:
The appellant appealed against an order denying Cenvat credit for inputs received from M/s. Gupta Enterprises. The investigation revealed that Gupta Enterprises did not supply goods to the appellant, leading to the denial of credit. The appellant argued that no statement from them was recorded, nor was their premises inspected. The transporters also did not deny transporting goods to the appellant. The appellant contended that without cross-examination of Gupta Enterprises, the demand was not sustainable. The AR supported the denial of credit based on thorough investigation. The Tribunal noted that no investigation was conducted at the appellant's end and no cross-examination was allowed. Citing a previous case, the Tribunal held that without cross-examination of persons relied upon by the department, the demand was not sustainable. Consequently, the Tribunal set aside the impugned order, allowing the appeal and granting consequential relief.

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