Cenvat credit denied for invoices without actual receipt of inputs; factual findings raised no substantial question of law.

No substantial question of law arises where the appeal only seeks reappreciation of factual findings and those findings are not shown to be perverse. The Tribunal's conclusion that invoices were accounted for without receipt of corresponding inputs was supported by investigation material and could not be disturbed. A vague plea of denial of cross-examination, unsupported by any specific request to summon identified witnesses, did not vitiate the demand. Cenvat credit is available only when duty-paid inputs are actually received in the factory and used in manufacture, so credit taken on invoices without actual receipt was rightly denied and the demand sustained.

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Issues: (i) whether the appeal raised any substantial question of law, including whether the findings of fact recorded by the Tribunal were perverse; (ii) whether denial of cross-examination or the challenge to cenvat credit availment on the basis of invoices without receipt of inputs vitiated the demand.

Issue (i): whether the appeal raised any substantial question of law, including whether the findings of fact recorded by the Tribunal were perverse.

Analysis: The challenge was directed essentially against factual findings. The Court found that the Tribunal had recorded a clear factual conclusion that the assessee had accounted for invoices without receiving the corresponding inputs in its factory and that the material on record established a systematic misuse of invoices. Such findings were supported by investigation material and were not shown to be perverse or vitiated by any error of law apparent on the face of the record.

Conclusion: No substantial question of law arose on this issue, and the factual findings were not liable to be disturbed.

Issue (ii): whether denial of cross-examination or the challenge to cenvat credit availment on the basis of invoices without receipt of inputs vitiated the demand.

Analysis: The Court held that the plea of denial of natural justice was vague and unsupported by any specific request to summon identified witnesses for cross-examination. On the merits, cenvat credit under the applicable rules is available only when duty paid inputs are actually received in the factory and used in manufacture. The Tribunal had found that the invoices were used as cover for local scrap that had not moved under the invoices, and that the assessee was involved in the arrangement. In those circumstances, the denial of credit could not be faulted.

Conclusion: The challenge on natural justice and cenvat credit failed, and the demand was upheld.

Final Conclusion: The appeal failed in its entirety because the dispute turned on factual findings, no substantial question of law was made out, and the assessee was found to have wrongly availed cenvat credit without receipt of the invoiced inputs.

Ratio Decidendi: A challenge in appeal does not raise a substantial question of law where it only seeks reappreciation of factual findings, and cenvat credit can be denied when the evidence shows that invoices were used without actual receipt of duty-paid inputs.

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