Cenvat credit on supplementary invoices allowed where no proof of suppression or collusion existed under Rule 9(1)(b).

Cenvat credit on supplementary invoices issued by a coal company was upheld because Rule 9(1)(b) of the Cenvat Credit Rules, 2004 applies only where the recipient has positive knowledge of suppression, collusion or other misconduct by the supplier. The supplier's differential duty dispute was still pending before the Supreme Court, so the position was debatable rather than settled, and a show cause notice to the supplier by itself did not establish suppression or collusion by the appellant. In the absence of any adverse material showing deliberate wrongdoing, the denial of credit was unsustainable and the appellant was entitled to avail the credit.

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Issues: Whether the appellant was entitled to avail Cenvat credit on supplementary invoices issued by the coal company and whether the pendency of the supplier's valuation dispute and the absence of any proved suppression or collusion attracted the bar under Rule 9(1)(b) of the Cenvat Credit Rules, 2004.

Analysis: The entitlement to credit turned on whether the appellant had positive knowledge of any suppression or misconduct by the supplier so as to invoke the exclusion under Rule 9(1)(b). The dispute regarding the supplier's differential duty liability was still pending before the Supreme Court, making the issue debatable rather than settled. In such a situation, mere issuance of a show cause notice to the supplier or a failure to ascertain the exclusion clause could not by itself establish suppression or collusion on the appellant's part, particularly when the invoices were issued by a Government undertaking and no adverse material showed deliberate wrongdoing by the appellant.

Conclusion: The appellant was entitled to avail Cenvat credit on the supplementary invoices, and the denial of credit was unsustainable.

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