Cenvat credit cannot be denied on a supplier's statement alone without corroborative evidence of non-receipt of goods.

Cenvat credit could not be denied merely on the basis of a supplier's statement that only invoices were issued, where the appellant produced invoices, statutory records and proof of payment by account payee cheques. Rule 9(3) of the Cenvat Credit Rules, 2002 placed the burden on the Revenue to disprove receipt of goods by cogent evidence. As no meaningful investigation was conducted at the manufacturer, supplier or transporter level, and no corroborative material showed that the transaction was only on paper, the denial of credit was unsustainable.

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Issues: Whether Cenvat credit could be denied solely on the basis of the supplier's statement that only invoices were issued, without corroborative evidence showing non-receipt of goods by the appellant.

Analysis: The appellant produced invoices, statutory records, and evidence of payment through account payee cheques. The Revenue did not conduct meaningful investigation at the end of the manufacturer, supplier, or transporter, nor did it produce cogent corroborative material to disprove receipt of goods. In the absence of such evidence, and having regard to Rule 9(3) of the Cenvat Credit Rules, 2002, the burden remained on the Revenue to establish that the transaction was only on paper. Mere reliance on the supplier's statement was held insufficient.

Conclusion: Cenvat credit could not be denied to the appellant on the material on record.

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