Cenvat credit requires proof of actual receipt of inputs; invoices alone cannot sustain credit where diversion is established.

Cenvat credit was denied where the assessee failed to prove actual receipt of duty-paid inputs in the factory. The Tribunal relied on transporter statements and surrounding circumstances to find that the goods covered by the invoices were diverted elsewhere and not delivered to the appellant's premises. In the absence of reliable transport, gate register, goods receipt note, lorry receipt, freight payment, or other corroborative evidence, the invoices alone were insufficient. The objection based on denial of cross-examination was rejected because no prejudice was shown and no independent evidence was produced to rebut the departmental case. Demand, interest, and penalties were upheld.

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Issues: Whether Cenvat credit was wrongly availed on invoices when the goods were not received in the factory and, if so, whether the demand, interest and penalties were sustainable.

Analysis: The Tribunal found that the evidence collected in the investigation, including transporter statements and surrounding circumstances, showed that the goods covered by the invoices were diverted elsewhere and not delivered to the appellant's factory. The appellant failed to produce any reliable transport or receipt documents such as gate register entries, goods receipt notes, lorry receipts, freight payment evidence or other corroboration to establish actual receipt of the inputs. The plea based on denial of cross-examination was rejected as no prejudice was shown, particularly when the appellant had not produced any independent evidence to contradict the departmental case. The Tribunal held that the facts and modus operandi were identical to earlier decisions where fraudulent passing of credit without receipt of goods had been established.

Conclusion: The credit was held to have been availed fraudulently without receipt of goods, and the demand, interest and penalties were upheld against the appellant.

Final Conclusion: The appeals failed and the impugned orders confirming recovery and penalties were sustained.

Ratio Decidendi: Cenvat credit cannot be sustained unless the assessee proves actual receipt of the duty paid goods, and uncorroborated invoices are insufficient where the evidence shows diversion or non-delivery of the goods.

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