Cenvat credit requires proof of actual receipt of goods; invoices alone and unsubstantiated hardship may not secure waiver.

A claimant for Cenvat credit must prove actual receipt and proper accounting of inputs; invoices alone do not discharge that burden where no movement or receipt of goods is shown. The note also states that financial hardship must be substantiated by the company's records, and substantial reserves and surplus may negate a plea for complete waiver of pre-deposit. It further records that, where transactions are admitted to have been undertaken only for turnover purposes without receipt of goods, a separate deposit direction against the Managing Director may be justified.

---

---

Issues: (i) whether the appellant had made out a prima facie case for waiver of pre-deposit in respect of the Cenvat credit demanded for invoices unaccompanied by receipt of goods; (ii) whether the plea of financial hardship justified complete waiver of pre-deposit, and whether the Managing Director was also liable to make a deposit.

Issue (i): whether the appellant had made out a prima facie case for waiver of pre-deposit in respect of the Cenvat credit demanded for invoices unaccompanied by receipt of goods.

Analysis: The burden of establishing admissibility of Cenvat credit lies on the person taking the credit. Under Rule 9(5) of the Cenvat Credit Rules, 2004, proper records of receipt, disposal, consumption and inventory of inputs and capital goods are required to be maintained, and the credit-taker must show that the goods were actually received and duly accounted for. Mere invoices, without movement or receipt of goods, were held insufficient to discharge that burden.

Conclusion: The appellant failed to establish a prima facie case for waiver of pre-deposit.

Issue (ii): whether the plea of financial hardship justified complete waiver of pre-deposit, and whether the Managing Director was also liable to make a deposit.

Analysis: The balance sheet showed substantial reserves and surplus and an amount available for appropriation, which negatived severe financial difficulty. The Managing Director's admission that the transactions were undertaken only for turnover purposes, despite no receipt of goods, justified a separate direction for deposit against him as well.

Conclusion: The plea of financial hardship was rejected, and the Managing Director was also directed to deposit a specified amount.

Final Conclusion: Pre-deposit was directed to the extent of the Cenvat credit with interest, along with a separate deposit by the Managing Director, and stay against recovery was granted only on compliance.

Ratio Decidendi: A person claiming Cenvat credit must prove actual receipt and accounting of inputs, and mere invoices do not satisfy the burden of proof under Rule 9(5) of the Cenvat Credit Rules, 2004.

---