Cenvat credit on third-party or endorsed invoices requires proof of input receipt; interest and penalty were also sustained.

Cenvat credit was disallowed where invoices stood in the names of third parties and the assessee could not establish receipt of inputs in its factory through reliable documentary evidence. The authority held that endorsed invoices alone were insufficient under excise law, and the plea based on Notification No. 27/2004-CE (NT) was rejected because the underlying receipt of inputs remained unproved. As the credit was wrongly availed on invalid documents, the related interest demand and penalty were also sustained.

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Issues: (i) Whether Cenvat credit was admissible on invoices issued in the name of third parties or on endorsed invoices where receipt of inputs in the factory was not established; (ii) whether the consequential demand of interest and imposition of penalty were sustainable.

Issue (i): Whether Cenvat credit was admissible on invoices issued in the name of third parties or on endorsed invoices where receipt of inputs in the factory was not established.

Analysis: The invoices were found to stand in the names of other entities and not in the name of the appellants. The record did not establish receipt of the inputs in the factory through acceptable documentary evidence. The authority also held that excise law did not permit availment of credit merely on the basis of endorsed invoices, and that allowing such credit would create revenue risk. The plea based on Notification No. 27/2004-CE (NT) dated 28-09-2004 was rejected because the invoices were issued to third parties and receipt of inputs itself remained disputed.

Conclusion: Cenvat credit was not admissible and the disallowance was upheld against the assessee.

Issue (ii): Whether the consequential demand of interest and imposition of penalty were sustainable.

Analysis: Once the credit was held to be wrongly availed on invalid documents, the related demand of interest and penalty followed from the same set of facts and findings.

Conclusion: The demand of interest and the penalty were upheld against the assessee.

Final Conclusion: The order of the lower authorities was affirmed and the appeal failed in entirety.

Ratio Decidendi: Cenvat credit cannot be availed on third-party or endorsed invoices unless receipt of inputs in the factory is established by reliable documentary evidence; where credit is wrongly taken, the consequential liability to interest and penalty may also be sustained.

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