Cenvat credit on dealer-routed steel ingots upheld where Revenue failed to rebut receipt of duty-paid goods.

Cenvat credit on steel ingots received through dealers was upheld because the Revenue failed to produce contrary evidence to rebut the claim that the goods were manufactured by the supplier and routed through proper channels. The Tribunal noted the absence of any inculpatory statement from the manufacturer-buyers and found that the material relied on did not establish non-receipt of duty-paid goods. As the receipt of duty-paid goods stood accepted, denial of credit was not justified, and the penalties on the manufacturer-buyers and dealers were also set aside.

---

---

Issues: Whether the manufacturer-buyers were entitled to Cenvat credit on steel ingots received through dealers and whether the penalties imposed on the manufacturer-buyers and dealers were sustainable.

Analysis: The Tribunal found that the Revenue had not produced contrary evidence to displace the appellants' case that steel ingots were manufactured by the supplier and supplied through dealers. The record did not show any inculpatory statement by the appellants, and the material relied upon by the Revenue did not establish that the goods were not received through the proper channel. In the absence of proper investigation and rebuttal evidence, denial of credit was not justified. As the receipt of duty-paid goods was accepted, the basis for imposing penalties on the manufacturer-buyers and dealers also failed.

Conclusion: The manufacturer-buyers were held to have correctly availed Cenvat credit, and the penalties imposed on the manufacturer-buyers and dealers were set aside.

---