Cenvat credit requires receipt of inputs and prescribed documents; unsupported credit is inadmissible and attracts interest and recovery.

Cenvat credit is available only when inputs are received in the factory and prescribed duty-paying documents are possessed under Rule 9. The article notes that the assessee's claimed credit was not supported by documentary evidence and was treated as taken without receipt of cenvatable inputs, making the credit inadmissible under the Cenvat Credit Rules, 2004. Once the credit was found wrongly taken and utilised, consequential interest liability and recovery followed. The challenge based on coercion and cited precedents did not overcome the factual finding that the statutory conditions for lawful availment were not met.

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Issues: (i) Whether the appellant was entitled to Cenvat credit of Rs. 2,04,74,204 in the absence of receipt of inputs and supporting duty-paying documents; (ii) whether the demand of interest and the adjudication confirming recovery could be sustained.

Issue (i): Whether the appellant was entitled to Cenvat credit of Rs. 2,04,74,204 in the absence of receipt of inputs and supporting duty-paying documents.

Analysis: Availment of Cenvat credit is conditioned by receipt of inputs in the factory and possession of prescribed documents under Rule 9. The record did not establish that the appellant had produced any duty-paying documents to justify the large credit reflected in its books, and the credit was treated as taken without receipt of cenvatable inputs. On the facts found by the adjudicating authority and accepted in appeal, the credit was not shown to have been lawfully available under the Cenvat Credit Rules, 2004.

Conclusion: The appellant was not entitled to the disputed Cenvat credit, and the finding against the appellant was / sustainable in favour of the Revenue.

Issue (ii): Whether the demand of interest and the adjudication confirming recovery could be sustained.

Analysis: Once the credit was held to be wrongly taken and utilised without compliance with the statutory conditions, the consequential liability to interest and recovery followed. The appellant's challenge based on alleged coercion and cited precedents did not displace the factual finding that the credit lacked documentary support and was not admissible in law.

Conclusion: The demand of interest and the adjudication confirming recovery were sustained in favour of the Revenue.

Final Conclusion: The appeal failed in entirety because the disputed credit was held inadmissible for want of prescribed supporting documents and lawful availment, and the consequential demand was upheld.

Ratio Decidendi: Cenvat credit cannot be availed or retained unless the statutory conditions of receipt of inputs and possession of prescribed duty-paying documents are satisfied; credit taken and utilised without such compliance is liable to reversal with consequential interest and recovery.

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