CENVAT credit reversal fails where documents show inputs were used in refurbishing work and duty was paid on clearance.

CENVAT credit reversal was not attracted because the department failed to prove that the inputs were cleared as such without duty payment. The record showed purchase orders, invoices and delivery challans linking the goods to refurbishing and fixture-related work, and the clearances were supported by duty payment. The allegation that the delivery challan particulars were manipulated was unsupported by evidence, and the assumption that the goods were bought under an earlier invoice was inconsistent with the documents produced. The CNC package and related components were traceable to later purchase invoices. On these facts, the demand could not be sustained.

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Issues: Whether the appellant was liable to reverse CENVAT credit on the inputs alleged to have been cleared as such without duty payment, and whether the documentary evidence established that the goods were in fact used for refurbishing work and cleared on payment of duty.

Analysis: The dispute turned on whether the inputs covered by the delivery challans were removed as such or were supplied as part of refurbishing and fixture-related work for customers. The appellant produced purchase orders, invoices and delivery challans to link the goods with the respective projects and to show that duty had been paid on the clearances. On the record, the finding that the delivery challan particulars were manipulated was not supported by evidence, and the assumption that the goods were purchased under an earlier invoice was contrary to the documents produced. The material also showed that the CNC package and other components were traceable to the later purchase invoices relied upon by the appellant.

Conclusion: The allegation of clearance of inputs as such without reversing CENVAT credit was not established, and the demand could not be sustained.

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