Cenvat credit on supplementary invoices cannot be denied absent fraud, suppression, or collusion in a sub judice duty dispute.

Cenvat credit on supplementary invoices cannot be denied merely because the recipient did not independently ascertain the bar in Rule 9(1)(b) of the Cenvat Credit Rules, 2004. Where the underlying duty or valuation dispute is already sub judice and no positive material shows fraud, suppression, or collusion, the exclusion for credit is not attracted. The fact that the invoices were issued by a Government of India undertaking also weighed against any inference of misconduct. On that basis, the credit denial was treated as unsustainable and the recipient was held entitled to avail credit on the supplementary invoices.

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Issues: Whether Cenvat credit could be denied on supplementary invoices issued by the coal company on the ground that the appellant failed to ascertain the bar under Rule 9(1)(b) of the Cenvat Credit Rules, 2004 and that the availment amounted to suppression or collusion.

Analysis: The entitlement to credit turned on whether the appellant had knowledge of any suppression or misconduct so as to attract the exclusion in Rule 9(1)(b) of the Cenvat Credit Rules, 2004. The dispute concerning valuation and the liability of the coal company was already pending before the Supreme Court, making the issue debatable. In such circumstances, mere non-ascertainment by the appellant could not be equated with suppression or collusion. The invoices were issued by a Government of India undertaking, and no positive act of fraud or suppression was established on record.

Conclusion: The denial of Cenvat credit was not sustainable, and the appellant was entitled to take credit on the supplementary invoices.

Final Conclusion: The appeal succeeded and the credit demand was set aside with consequential relief to the appellant.

Ratio Decidendi: Where the underlying duty/valuation dispute is sub judice and no positive material shows fraud, suppression, or collusion, credit cannot be denied merely because the recipient did not independently ascertain the exclusion contemplated by Rule 9(1)(b).

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