Substance over form governs Cenvat credit: actual tax payment supports credit and export refund despite debit notes.

Cenvat credit cannot be denied on a mere technical objection where the job worker paid service tax and issued debit notes instead of invoices. The governing principle is that substance prevails over form, so actual tax payment is sufficient even if the charging document is questioned. Credit also cannot be refused on the ground that the service tax was allegedly not payable, because entitlement turns on tax actually paid. Where the credit was validly taken and the goods were exported, refund under Rule 5 of the Cenvat Credit Rules is available.

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Issues: (i) Whether Cenvat credit could be denied merely because the job worker issued debit notes instead of invoices; (ii) Whether credit and refund could be denied on the ground that the service tax paid by the job worker was allegedly not payable.

Issue (i): Whether Cenvat credit could be denied merely because the job worker issued debit notes instead of invoices.

Analysis: The service tax had in fact been paid by the job worker. The objection was only to the manner in which the charge was raised, namely by debit notes rather than invoices. The governing principle applied was that substance prevails over form, and credit cannot be denied on a purely technical objection when the tax payment is established.

Conclusion: Credit could not be denied on the ground that the job worker used debit notes instead of invoices.

Issue (ii): Whether credit and refund could be denied on the ground that the service tax paid by the job worker was allegedly not payable.

Analysis: The revenue did not dispute that the service tax had actually been paid. The entitlement to credit depends on tax paid, not on the department's view that the tax was not payable. Since the appellant had taken credit of tax actually paid and the goods were exported, refund under Rule 5 of the Cenvat Credit Rules was available.

Conclusion: Credit and refund could not be denied on the ground that the service tax was allegedly not payable.

Final Conclusion: The appellant was entitled to Cenvat credit and refund, and the rejection orders were unsustainable.

Ratio Decidendi: Cenvat credit cannot be denied on a mere technical objection where tax has actually been paid, and refund of accumulated credit is allowable under the export refund mechanism when the credit is otherwise validly taken.

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