Cenvat credit on supplementary invoices remains admissible absent proven suppression, collusion, or intent to evade duty.

Cenvat credit on supplementary invoices issued for upward price revision is admissible unless the additional duty became payable from the supplier on account of fraud, collusion, wilful misstatement, suppression of facts, or intent to evade duty. In the absence of a show cause notice against the supplier, any proceeding for penalty under Section 11AC of the Central Excise Act, 1944, or any allegation of collusion between supplier and recipient, denial of credit at the recipient's end could not be sustained. Mere presumption of suppression by the supplier was insufficient, and the assessee was entitled to the credit.

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Issues: Whether Cenvat credit taken on the basis of supplementary invoices issued by the supplier for upward price revision was inadmissible under Rule 7(1)(b) of the Cenvat Credit Rules, 2002 on the allegation that the supplier had short-paid duty by suppression or other intent to evade duty.

Analysis: The credit can be denied on supplementary invoices only when the additional duty became recoverable from the manufacturer on account of non-levy or short levy by reason of fraud, collusion, wilful misstatement, suppression of facts, or similar contravention with intent to evade duty. The record disclosed no show cause notice against the supplier for recovery of duty, no notice for penalty under Section 11AC of the Central Excise Act, 1944, and no allegation of collusion between the supplier and the recipient. In the absence of such foundational findings against the supplier, denial of credit at the recipient's end could not be sustained. The earlier Tribunal view that credit cannot be denied on a mere presumption in the absence of proceedings against the supplier squarely applied.

Conclusion: The credit was held to be admissible and the denial of Cenvat credit was unsustainable, in favour of the assessee.

Ratio Decidendi: Cenvat credit on supplementary invoices cannot be denied unless duty recovery against the supplier is founded on a proven case of fraud, collusion, wilful misstatement, suppression of facts, or intent to evade duty, and mere allegation without proceedings against the supplier is insufficient.

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