Bona fide duty-paying invoices protect Cenvat credit when the supplier fails to pay duty.

Cenvat credit cannot be denied to a buyer solely because the supplier failed to discharge duty where the goods were received under valid duty-paying invoices, the invoice value was paid, and the transaction was bona fide. The analysis distinguishes cases involving bogus invoices or absence of genuine receipt, and relies on the Board's circular and supporting precedent to confirm that consignee-side credit should not be reversed on supplier default alone. The assessee's credit entitlement was therefore upheld.

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Issues: Whether Cenvat credit could be denied to the buyer merely because the supplier had not discharged the duty, when the goods were received under valid duty-paying invoices and the transaction was bona fide.

Analysis: The input goods were admittedly received and used by the appellant under valid invoices, and the invoice value was paid to the supplier. The denial of credit was based only on the supplier's failure to pay duty. The Board's circular clarified that recovery of Cenvat credit from the consignee need not be pursued where the consignee's transaction is bona fide. The cited precedent also supported the position that buyer-side credit cannot be reversed merely due to supplier default, distinguishing cases involving bogus invoices or absence of bona fide transaction.

Conclusion: Cenvat credit could not be denied to the appellant solely because the supplier failed to pay duty, and the assessee's credit entitlement was upheld.

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