Cenvat credit cannot be denied on invoice endorsement alone where receipt of goods and invoice-based accounting are established.

Cenvat credit could not be denied merely because invoices showed delivery at the supplier's godown when the assessee produced VAT Form 26 and invoice material indicating that the goods crossed inter-State barriers and were received in the factory. The invoice endorsement alone did not prove delivery to a third party, so the credit disallowance on non-receipt grounds was unsustainable. Cenvat credit also could not be denied for alleged non-maintenance of records under Rule 9(6) where the assessee had entered the credit in its Cenvat account on the strength of invoices and no prescribed accounting manner was shown to have been violated. Both disallowances were set aside.

---

---

Issues: (i) Whether Cenvat credit could be denied on the ground that the invoices recorded delivery at the supplier's godown and the Revenue alleged non-receipt of goods by the appellant. (ii) Whether Cenvat credit could be denied for alleged non-maintenance of proper records under Rule 9(6) of the Cenvat Credit Rules, 2004.

Issue (i): Whether Cenvat credit could be denied on the ground that the invoices recorded delivery at the supplier's godown and the Revenue alleged non-receipt of goods by the appellant.

Analysis: The invoice entry "Delivery: Bansal Processing House" was explained by the appellant as referring to the supplier's godown situated there. The appellant also produced VAT Form 26 and the surrounding invoice material to show that the goods had crossed inter-State barriers and were received in the factory. On these facts, the mere endorsement in the invoice did not establish that the goods were delivered to a third party instead of the appellant.

Conclusion: Cenvat credit could not be denied on this ground and the disallowance of Rs. 13,95,415/- was unsustainable.

Issue (ii): Whether Cenvat credit could be denied for alleged non-maintenance of proper records under Rule 9(6) of the Cenvat Credit Rules, 2004.

Analysis: The appellant had entered the credit in its Cenvat credit account on the strength of invoices. No prescribed manner of maintenance of accounts was shown to have been violated, and the account entries themselves evidenced maintenance of records for availing credit.

Conclusion: Cenvat credit could not be denied on this ground and the disallowance of Rs. 6,24,117/- was unsustainable.

Final Conclusion: The denial of Cenvat credit on both grounds was set aside, and the appellant obtained full relief.

Ratio Decidendi: Cenvat credit cannot be denied merely on the basis of an invoice endorsement or a formal objection to record-keeping when the assessee establishes receipt of goods and availment of credit on the strength of invoices.

---