Cenvat credit denial upheld for paper invoices issued by a dealer with forged registration documents and no real premises.

Cenvat credit was denied where dealer invoices were found to be unsupported by any genuine movement of duty-paid goods. The dealer had obtained registration on the basis of forged rent documents, had no established godown or possession of premises, and the registration was cancelled retrospectively. On the record, the invoices reflected only paper transactions, and the manufacturer failed to prove actual purchase, transit sale, or proper verification of the dealer's identity and address. As the statutory conditions for credit on dealer invoices were not satisfied and the burden of proving admissibility was not discharged, the denial of credit was upheld.

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Issues: Whether Cenvat credit could be denied where the invoices were issued by a dealer whose registration had been obtained on the basis of forged rent documents and whose godown or possession of premises was not established, resulting in only paper transactions and fraudulent availment of credit.

Analysis: The record showed that the dealer had no genuine premises or godown and had secured registration by submitting bogus rent receipt and rent deed. The registration was cancelled retrospectively, and the invoices issued by such dealer were treated as unsupported by any real receipt, storage or dispatch of duty-paid goods. The appellant did not adduce evidence to show actual purchase from stock, transit sale, or due verification of the dealer's identity and address. In such circumstances, the statutory requirements governing credit on dealer invoices and the burden on the manufacturer to prove admissibility were not satisfied.

Conclusion: Cenvat credit was rightly denied and the appeal failed.

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