Cenvat credit on duty-paid invoice remains admissible when receipt and duty payment are established, despite supplier manufacture disputes.

Cenvat credit could not be denied to the recipient where goods were received under a valid duty-paid excise invoice and the record showed that duty had been paid and the goods had been received. The applicable credit rules allowed credit on the basis of a manufacturer's invoice, subject to reasonable steps by the recipient to verify duty payment. The dispute over whether the supplier was the actual manufacturer was not decisive for the recipient's credit claim when the foundational facts of invoice, duty payment and receipt were established. The credit disallowance, related interest and penalty, and confiscation-linked reliefs accordingly did not survive.

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Issues: Whether Cenvat credit could be denied to the recipient on the ground that the supplier had allegedly not manufactured the goods, when the goods were received under a duty-paid invoice and duty had been shown as paid.

Analysis: The invoice issued by the supplier contained the particulars required for excise documents, and the record showed payment of duty by the supplier and receipt of the goods by the recipient. The governing credit rules permitted credit on the basis of a manufacturer's invoice, subject to the recipient taking reasonable steps to ensure that duty indicated in the documents had been paid. The majority held that the dispute regarding whether the supplier had itself manufactured the goods was not for the recipient's credit claim where duty payment and receipt of goods were established, and the Revenue had not disproved those core facts to the required standard.

Conclusion: Cenvat credit was admissible to the recipient and could not be denied on the mere allegation that the supplier was not the actual manufacturer.

Final Conclusion: The disallowance of credit, the consequential demand of interest and penalty, and the confiscation-related reliefs did not survive, and the assessee's credit claim was sustained.

Ratio Decidendi: Where goods are received under a valid duty-paid excise invoice and duty payment is established, Cenvat credit cannot be denied to the recipient merely because the supplier's manufacturing activity is disputed, unless the foundational facts of receipt and duty payment are shown to be false or inapplicable under the credit rules.

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