Cenvat credit burden of proof: Revenue must first prove wrongful availment with reliable evidence before shifting onus to assessee.

Where the Revenue alleges wrongful availment of Cenvat credit, it must first prove the foundational fact of credit availment with reliable evidence. The record contained no probative material, such as RG-23 entries or supporting documents, to show that the assessee had actually taken the credit as alleged, so no burden shifted to the assessee to prove reversal or non-availment. On that basis, the demand, disallowance of credit, and penalty were held unsustainable and were set aside.

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Issues: Whether the Revenue had discharged the burden of proving that the assessee had availed Cenvat credit on the relevant inputs and, if so, whether the demand and penalty could be sustained.

Analysis: The dispute turned on the Revenue's allegation that Cenvat credit had been wrongly availed on inputs linked to goods later covered by debit notes. Since this was a foundational factual assertion made by the Revenue, the burden lay on it to establish availment of credit by cogent evidence. The record did not disclose any probative material such as RG-23 entries or other supporting documents to prove that the assessee had actually availed the credit in the manner alleged. In the absence of such proof, the question of requiring the assessee to prove reversal or non-availment did not arise, and the supposed correlation between debit notes and invoices became irrelevant.

Conclusion: The Revenue failed to prove wrongful availment of Cenvat credit. The orders disallowing credit, demanding recovery, and imposing penalty were unsustainable and were set aside in favour of the assessee.

Ratio Decidendi: Where the Revenue alleges wrongful availment of Cenvat credit, it must first prove the foundational fact of availment by reliable evidence before any onus can shift to the assessee.

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