Prima facie entitlement to Cenvat credit supports stay of recovery where duty-paid invoices were relied upon.

Cenvat credit was treated as prima facie available where the recipient received goods under duty-paid invoices and no evidence showed that it had express knowledge that the goods were manufactured from duty-free imported raw materials. On that basis, the tribunal held that the appellant had made out a prima facie case for waiver of recovery, and recovery of the confirmed duty, interest and penalty was stayed until disposal of the appeal. The issue was left for deeper examination at the final hearing.

---

---

Issues: Whether the appellant had made out a prima facie case for stay of recovery of the confirmed duty, interest and penalty.

Analysis: Cenvat credit under the Cenvat Credit Rules, 2004 is available to the recipient when goods are received under a duty-paying document. The records showed that the appellant stated it was not aware from which account duty was paid by the supplier and that it had taken credit only on the strength of the duty-paid invoices. No evidence was brought on record to show express knowledge on the appellant's part that the goods were manufactured from duty-free imported raw materials. The matter required deeper examination at final hearing.

Conclusion: A prima facie case for waiver of recovery was made out and recovery of the confirmed dues and penalties was stayed till disposal of the appeal.

---