CENVAT credit verification requires prescribed proof of supplier identity and address; substitute precautions are insufficient.

Rule 7(2) of the CENVAT Credit Rules, 2002 requires a manufacturer to take all reasonable steps to ensure that inputs are duty-paid, and the Explanation confines compliance to the prescribed modes of verifying the supplier's identity and address. A stock declaration and an undertaking from the principal manufacturer did not satisfy those statutory methods, so they were insufficient to establish due verification for CENVAT credit. On that reasoning, the assessee failed to show compliance with the rule and was not entitled to relief against the demand.

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Issues: Whether the assessee had taken reasonable steps under Rule 7(2) of the CENVAT Credit Rules, 2002 to ensure that the inputs were duty-paid so as to avail CENVAT credit.

Analysis: Rule 7(2) required the manufacturer taking CENVAT credit to take all reasonable steps to satisfy itself that the inputs were covered by documents evidencing payment of duty. The Explanation treated reasonable steps as satisfied only where the manufacturer or producer verified the identity and address of the supplier from personal knowledge, from a familiar handwriting or signature certificate, or from a certificate issued by the Superintendent of Central Excise. The assessee relied on a stock declaration and an undertaking from the principal manufacturer, but those measures did not fall within any of the statutory modes prescribed by the Explanation. The assessee therefore failed to establish compliance with the statutory requirement.

Conclusion: The assessee did not fulfil the requirements of Rule 7(2) and was not entitled to relief against the demand.

Ratio Decidendi: Compliance with Rule 7(2) of the CENVAT Credit Rules, 2002 requires verification of the supplier's identity and address in the manner prescribed by the Explanation, and substitute precautions not falling within those modes are insufficient to avail credit.

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